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Facing up to your debt threats

    by: By Sophie Elsworth     From: News Limited newspapers     March 25, 2012
DODGING debt collectors comes at a price.

Avoiding unpaid debts will often result in your credit file getting a big black mark against it, so tackling debt as quickly as you can is crucial.

Prushka Fast Debt Recovery, Australia's largest privately owned collections company, is chasing debts for 44,000 small to medium businesses.

Chief executive Roger Mendelson says he has more than two million Australians on his books with debts starting from as little as $45.

"Any householder who has had unpaid debts over the years, the chances are they are on our database," he says. "By the time the debt comes to us, it's fairly seriously overdue."

Mendelson says clients usually contact him when they have customers with outstanding debts that are more than 90 days overdue.

He says people who are contacted by a debt collector should not regard "the collection agency as the enemy."

"My advice is if you can't pay, communicate by phone quickly and be upfront. Be polite ... the worst thing people can do is ignore the debt because it puts them on the back foot."

Mendelson says the average debt is about $300.

MyBudget director Tammy May says unpaid bills can be sorted out with debt collectors, but make sure you don't get your back up if they call on you.

"Work with the debt collector, let them know your position, why you have fallen behind and what you can afford to pay back on the debt. Make sure it's realistic," she says.

"Although it can be embarrassing and stressful to receive that type of call, it really is best not to bury your head in the sand and try and ignore it."

If you are worried about your credit file being tarnished, May says it varies from case to case.

"It depends on the debt collector or the financial institution. Some lenders have it in their policies where it (debts owing) is not recorded on a person's credit file," she says.

A black mark on your credit file will last five years.

Last modified onMonday, 17 March 2014 07:23

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