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Dealing with debt collectors

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Larisha Jerome is a proud Jarowair, Wakka Wakka & Wulli Wulli woman with strong family ties to South East Queensland. She also has a strong connection to Darug country after growing up in Western Sydney. Larisha is the First Nations Foundation’s Community Development and Project Officer. 

Let’s talk debt, money shame and money anxiety disorder.

For those that don’t know, there is an “undiagnosed” term called Money Anxiety Disorder to describe the condition of constant worry and unease about money, which is often felt when dealing with debt collectors.

Money shame can be crippling and can significantly affect your mental health.

Often people will get anxious and try and avoid the debt collector and have the thought that “ignored debt will go away”. Unfortunately, this is not the case.

One of the impacts may be a persistent pattern of self-destruction and self-limiting behaviour towards your money habits which can spiral out of control relatively quickly if not dealt with early on.

It is easy to be overwhelmed and ashamed of your financial situation, but it’s important to keep in mind that debt collectors are not all bad and they may help to find the right solution.

No matter what your financial situation is, there is always an answer to get you back on track and debt collectors are there to assist (and to get their debt paid). It’s also important though that they have the best intention to get you back on track.

Sometimes it is a matter of setting your pride and emotions aside and not panicking.

My top 5 tips dealing with a debt collector:
1. Do not have the mentality of “ignored debt will go away” and do not panic. Recognise the situation and the earlier it is dealt with, the higher chance it will not spiral into something bigger.

2. Be open, honest and communicate with the debt collector around your financial situation and other debts you may have.

3. Know your financial rights – negotiate with the debt collector an arrangement that will work for you.

4. Following on from the top tip, do not over-commit yourself and manage your debt with appropriate financial management and a realistic budgeting plan that can help you to make repayments on time.

5. Seek Professional Help – whether that be a free Financial Counsellor (National Debt Helpline 1800 007 007 ), Consumer Protection Team (Legal Aid – Indigenous Information Line 1800 650 143) or if due to Family & Domestic Violence with a legal service with a Financial Abuse Prevention Unit to seek legal advice and advocacy so they can provide financial advice that will help put you in a better financial position.

Under the Australian Consumer Law, a debt collector must not:
• Use physical force or coercion (forcing or compelling you to do something)
• Harass or hassle you to an unreasonable extent
• Mislead or deceive you (or try to do so)
• Take unfair advantage of any vulnerability, disability or other similar circumstances affecting you (this may amount to unconscionable conduct).

Debt collectors do however have the right to:
• Make a demand for payment
• Make an arrangement for repayment
• Find out why an agreed repayment plan has not been met and to review a repayment plan after an agreed period of time.

Do not forget that debt collectors are just as human as you are, in the end they are just doing their job and are there to help recover the debt. Kindness goes a long way when dealing with one and there’s help available to get out of debt.

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