Credit and Debt

Credit and Debt

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Taking instructions

This section sets out a checklist of issues to consider when taking instructions from a client who needs assistance with a credit or debt matter. Some of these issues are sensitive, so it won’t always be appropriate to directly ask all of these questions; these are general guidelines about the kind of information you are trying to obtain.

  1. Amount owing - How much is owing on the loan, credit card or bill? Does the client dispute the amount owed?
  2. Dates - When was the debt incurred and when was the last payment made? (This is relevant to both whether the debt is statute barred and which legislation applies).
  3. Circumstances - What are the client's circumstances?
    • Are they receiving a Centrelink benefit or do they receive a wage?
    • Do they have any assets (including property, land, bank deposits, jewellery or a car worth more than $7,600)?
    • Do they hope to re-enter the workforce or start their own business in the future or is it likely that they will acquire any assets (for example, through inheritance or divorce proceedings)? 
    • What other hardship do they experience (for example, homelessness, mental or physical illness, substance abuse problems and/or family breakdown or family violence)?
  4. Stage of debt - What stage is the debt at and what documentation has the client received (for example, reminder bills, a letter of demand, any court documentation or a warrant for seizure of goods)?
  5. Type of debt - What is the nature of the debt(s) (for example, utilities, credit card, mobile phone, insurance, Centrelink, tax, mortgage)?
  6. Contract - Does the client have a copy of the contract they entered into?
  7. Consumer credit - Is it a consumer credit contract (for example, car loans, personal loans, home loans, consumer leases or credit cards)? Business credit and credit taken out for the purpose of investment other than in residential property (for example, shares) are not covered by consumer credit law. Mobile phone contracts and utilities bills are not regulated by the consumer credit regime, but fall under the Australian Consumer Law.
  8. Contact with the creditor - Has the client, or has someone on their behalf (such as a caseworker or financial counsellor) been in contact with the creditor yet?
  9. Debt collector - Has the debt been sold to a debt collector i.e. who is contacting the client? Is it the person they owe money or another entity?
  10. Details about entering into the contract - In what circumstances was the contract made? Consider the client's circumstances and any unfair advantage, misleading and deceptive conduct or a failure to provide necessary information when the client was entering into the transaction. For consumer credit contracts, also consider whether the client had an ability to repay the debt in accordance with the contract at the time they entered into it.
  11. Mortgages and secured debts - Is it a secured debt i.e. is there a mortgage over a person's home or is the loan secured by other property such as a car?
  12. Financial counsellors - Has the client seen a financial counsellor? Would they like to?
  13. Preferred outcome - What outcome is the client seeking (i.e. would their ideal outcome be arranging a manageable payment plan; do they dispute the debt; or are they unable to repay any of the money)?
  14. Income and expenses - What are the client's fortnightly income and expenses (for example, wages or a Centrelink benefit minus expenditures on rent, bills, groceries, public transport, payments of any other debts, medication and child support) and how much is left each fortnight (see sample budget)?
  15. Centrepay - If the client receives a Centrelink benefit, are they making any bill payments or debt repayments via Centrepay? If not, would they like to set up a Centrepay deduction to help them manage payments or repayments?
  16. Support workers - Does the client have a GP, case worker, housing worker, psychologist, drug and alcohol worker, psychiatrist or any other support worker that would be willing and able to provide supporting documentation regarding the client's circumstances? If yes, does the client consent to you contacting that professional? If not, would the client be interested in a referral to one or more of these support services?