Ignoring debt collection notices, Perth or anywhere in Australia may appear like a way to wait out a situation, but in the real sense, silence may only make a situation that is manageable into a long-term headache.
Australian creditors and collection agencies are legally entitled to escalate unpaid debts, and neglecting their letters or calls might attract devastating financial and legal problems. So before you opt to ignore their notices, take into consideration what can happen afterwards. Keep reading as we will share with you everything that you need to know and stay away from in case you get a debt recovery notice.
The first impact of ignoring a debt notice is that the due amount can grow. Initial debt usually keeps growing with interest, late charges or collection costs. This implies that a relatively small unpaid bill might end up being very large over time.
Moreover, when the creditor transfers the debt to a collection agency or arranges legal services, you will be subjected to extra expenses, namely, administration expenses, legal expenses, or enforcement expenses. Ignoring the notice almost guarantees the debt will become more expensive.
The other significant effect is that it will hurt your credit file. When an unpaid debt gets reported by the lending agency or a collection agency, it could result in a default listing or negative credit history. It can seriously hamper your credit capacity, whether in the form of new credit like a mortgage, personal loan, or even a rental agreement.
When a debt is outstanding, and you ignore notices for the debt recovery process, Perth or anywhere in Australia, creditors may make a claim in court, particularly where the notice was part of a formal demand. Once you are taken to court, if you fail to respond to the summons or statement of claim, the court may give a default judgment against you.
The default judgment following legal steps after ignoring debt recovery notices in Perth or anywhere in Australia allows creditors to enforce the debt. That may include:
When one ignores a notice, they do not get out of the debt but only get subjected to a more forceful court process and the cost of the court proceeding and hiring civil litigation lawyers Perth or anywhere in Australia is usually greater than the debt itself.
By not responding to a debt notice, you are deprived of the chance to challenge or bargain the debt on reasonable terms. When you pay on time, particularly when you really feel that you are not in debt or that there is a mistake or injustice or the amount is incorrect, then you can request evidence, object to the debt, or negotiate the payment terms.
When you take the case to court, and the judgment is made, it is much more difficult to dispute the debt or to argue your case. The default judgment complicates it significantly to negotiate discounts, payment arrangements or dispute the validity of the debt.
To avoid additional contacts with the debt collectors, it is better to pay attention to the debt recovery notices, since ignoring them may lead to even more contacts, in the form of letters, emails, phone calls, or home visits.
You should be aware of your rights: the collectors should not resort to threats, coercion, use of physical force, or fake legal threats. If you feel you are being harassed, then you need to seek the help of litigation lawyers, Perth. Nonetheless, emotional stress, anxiety, or financial pressure can be caused even by lawful, continuing contact.
When a debt turns either into a default or one that is liable to be judged in court, the effect extends far beyond the original creditor. One of the consequences of a damaged credit report or a judgment is that it will limit your eligibility to get:
Even after paying the debt (or even settling it), the negative history can be in your system and have an impact on your future finances.
Ignoring a debt recovery notice in Australia is rarely a harmless gamble. It can result in increased interest and charges, garnished wages, foreclosure, ruined credit reports, and long-lasting financial stress. If you receive a recovery notice, the best route is not to ignore it. Instead, review the debt carefully, consider whether you owe what’s asked, take the help of debt recovery lawyers Perth and if you fail to respond promptly.