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WA Settled Credit Card Debt and Debt Collectors?

Discussion in 'Debt and Bankruptcy Law Forum' started by Chris1949, 2 September 2014.

  1. Chris1949

    Chris1949 Member

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    Almost two years ago I was retrenched from a high paying job leaving me with considerable credit card debt. Rather than collect the "dole" I decided to live entirely on personal savings and draw downs on my superannuation to maintain my lifestyle whilst looking for work - which never eventuated. Finally I applied for the Newstart allowance and sought the help of my local government financial counsellor. The plan of action was to sell my house, finalise the small mortgage and make an offer of settlement to all my creditors, whilst retaining enough to buy into a retirement village, leaving a small "nest egg" to make life comfortable until I could claim the age pension in December this year.

    We approached all creditors and made full and frank disclosure of my circumstances and made an offer of 50% of the outstanding balances. Eventually, all agreed to this (in writing), payments were made and I have documentary evidence to show these payments. I thought that would be an end to it and I'd be able to get on with my life and look forward to a frugal but worry-free retirement. However, I'm now told by an accountant friend of mine that, regardless of whatever documents I've received (including statements showing zero closing balances), the remainder of these debts remain and that they can be sold to debt collectors who can harry me into the grave if need be. The thing that worries me is I recently had a missed call on my home phone and, checking with an Internet reverse phone number site, it turns out it was from a debt collection agency with a reputation for being particularly nasty. I've received nothing by mail indicating that any debt has been reassigned.

    Naturally I'm worried. I did have a little work this year and i managed to save just enough to get me through to pension age, but that finished at the end of June this year. My greatest concern is that I can now be faced with having to deal with a debt collector harassing me for years to come. How do I stand legally?
     
  2. Sophea

    Sophea Well-Known Member

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    While it is legal to sell 'actual' debts to to third parties, I cannot see how it could possibly be legal to sell a debt that has been paid or varied to nil. The debt itself which is being sold is the right or entitlement to be paid money, which no longer exists if you have settled the debts. It may be one of those urban myths floating about.

    State-based property legislation that prescribes that when a debt is assigned, the assignor must give express notice of the assignment to the debtor in writing. So if one of your creditors had sold your debt off to someone else they would have to provide notice to you of this.

    In addition, the Debt collection guideline includes provisions on:
    • the responsibility of creditors/collectors to provide copies of contracts and
    related documents to the debtor if requested
    • restricting contact with third parties of the debtor
    • the onus of proving a debt, which falls on the creditor/collector
    • the Trade Practices Act and the ASIC Act, which generally prohibit unfair practices
    and unconscionable conduct.

    Let us know if something else happens and your fears eventuate.
     
  3. John R

    John R Well-Known Member

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    Hi @Chris1949
    First, good work on maintaining a paper trail as you work through your debt issues.

    ASIC's MoneySmart website provides the following advice if a debt collector contacts you about a settled debt:
    Hope this helps. Please keep us updated of your progress.
     
  4. Chris1949

    Chris1949 Member

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    Many thanks for that, I've had no further attempts at contact and further 'anecdotal' evidence seems to point to this person being a "kite flyer" working for a collection agency with a nasty reputation. For this reason I'm a bit wary of giving them any personal information. Not only do I have documentary proof that all my debts are settled, the financial counselor who helped me also has copies.
     
  5. Chris1949

    Chris1949 Member

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    That's a great help. There's been no further apparent attempt to contact me. There's anecdotal evidence which indicates that the person in question is an unscrupulous operator who relies on scare tactics. Your clarification of where onus of proof falls is priceless. Many thanks.
     

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