Have you recently received a debt collection notice or phone call about an old debt, or think you may have some old debt that you still haven’t paid? One of the main questions on your mind is likely to be, “Do I have to repay this old debt?”.
Many would assume the answer is yes, starting feeling anxious and stressed, and may even go straight to paying this debt without thinking. What you may not know, is that in some cases the answer to that question may actually be no. Therefore, it’s really important to review and seek some advice, prior to taking any action.
At Life After Debt, we value the importance of knowing your legal rights and want to ensure you do so. And with that in mind, we’re using this blog to provide you with valuable knowledge and information on the laws surrounding ‘old debts’ in Australia.
Is your debt more than six years old?
If a debt collector or lender has asked you to pay a debt that is more than six years old, it’s important to know your rights.
You may not have to pay an old debt if your last payment was made more than six years ago, or no court action has been taken to recover the debt in the meantime.
In these cases, the debt may be statute barred, which means that by law (the Limitation Act), the lender has run out of time to use certain types of action to try and make you pay the debt. Therefore, you may actually have a defence, if legal action is made against you.
How do you confirm if your debt is statute barred?
If you think your debt may be statute barred, it’s important to confirm this prior to contacting the debt collector or lender, or taking any other action.
How do you do this? By contacting an expert for advice, of course.
Community Legal Centres, Legal Aid agencies and Financial Counselling Australia, offer free legal advice and can help you confirm this.
Don’t ignore your debts
While we feel it’s important to advise you of your rights and ensure you don’t pay any old debts that you may not have to pay, we also feel it’s important to remind you not to ignore your debts.
In almost all cases, your debts won’t go away. Even if you think they have, these old debts have a habit of reappearing again ‘out of the blue’, and we don’t want that happening to you.
Whilst we can’t make your old debts go away, we can provide advice and refer you to people who can help. At Life After Debt® we have offices in Perth and Sydney; we can help you reduce your debt and avoid bankruptcy by offering affordable, practical financial solutions, proven to relieve hardship.
We provide honest and sympathetic, without judgement, advice. Contact us to see how we can help you today.