Debt recovery and enforcement

Disputing that you owe a debt

What can I do if I disagree that I owe the money?

You should tell the lender or debt collection agency as soon as possible that you dispute the debt, and tell them why. Do this in writing and keep a copy of the letter.

If the debt is $15,000 or less, you can take a claim to the Disputes Tribunal, where you ask them to make an order that you don’t owe the disputed amount (see the chapter “The Disputes Tribunal”). Claims between $15,000 and $20,000 can also be taken to the Tribunal, if both sides agree to dealing with the dispute this way.

All lenders who use credit contracts must be registered as financial service providers and be members of an approved dispute-resolution scheme. Therefore, if the disputed debt arises out of a credit contract, you can complain to the dispute-resolution scheme the lender belongs to (see “Other legal protections when you get credit” in this chapter).

If you simply do nothing, then you’re leaving the lender to bring enforcement action against you.

If you dispute the debt, the lender or debt collection agency may decide to:

  • negotiate with you about the debt, or
  • take court action to recover the debt (see “How are debts recovered through the courts?” below).

If you need help, get support from your local budget advice service (see “Other resources” at the end of this chapter).

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