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When to engage a debt collector

There are two questions that the Ezi Debt Collection team are frequently asked; 1. ‘how early can I begin debt collection activity?’, and 2. ‘how late is too late for debt collection activity to begin?’

Before these questions can be answered, there are certain criteria that need to be fulfilled prior to passing a debt on to a debt collector.

All creditors should confirm that the invoice in question has in fact been issued to their debtor, and a reasonable period for payment to be fulfilled has expired. Under Australian regulations, it is unlawful for a debt collector to attempt the recovery of a debt which does not meet these requirements.

Once a debt has been determined as valid, the questions of timing can be answered.

While no standard law exists around how early a debt may be passed to a debt collector, it is unlawful to attempt the collection of a debt which has not yet passed its stipulated ‘payment due’ date. As a guide, Ezi Debt Collection recommends waiting at least 14 days past the invoice due date before escalating to a debt collector. During this period, you should attempt to contact the debtor with a friendly reminder to pay the invoice.

Laws DO exist around how long a debt may exist before it is no longer considered valid. In Australia, after a period of 6 years, an outstanding debt is deemed invalid. It is important to note that this date may be pushed back by a debtor making payment, or admitting in writing that a debt is owed. In such instances, the origin of the 6-year period would be reset to the date in which this latest action took place.

If you’ve got a debt that you’re considering writing off, our “no collection, no fee” model is perfect for you – there’s no risk trying debt recovery with Ezi Debt Collection.