Glossary of Terms
Supporting the Navigating Financial Legal Problems Survey
Supporting the Navigating Financial Legal Problems Survey
A creditor is a person or organisation to whom someone owes money to. There are many different examples of creditors, including:
A debtor is a person that owes someone money. Within the context of this survey, the debtor is you.
By enforcement action, we mean an action with legal consequences that bound you to obligations regarding the repayment of an unpaid debt. These obligations include, among other things:
An enforcement action may be imposed upon you against your will by a court, or you may have chosen to abide by certain obligations.
When a creditor threatens you with legal action, they are threatening to take enforcement action against you.
A debt agreement is entered into when creditors agree to accept an amount of money from the debtor, that the debtor can afford. This amount may be less than the total debt owed. The debtor pays this amount over a set period to settle their debts. Once the debtor has paid the agreed amount, the debt is considered to have been paid in full.
A debt agreement is not the same as a debt consolidation loan, informal payment arrangements with creditors, or a hardship agreement.
By enforcement action, we mean an action with legal consequences that bound you to obligations regarding the repayment of an unpaid debt. These obligations include, among other things:
An enforcement action may be imposed upon you against your will by a court, or you may have chosen to abide by certain obligations.
When a creditor threatens you with legal action, they are threatening to take enforcement action against you.
Regarding debt agreements, a creditor may have begun court proceedings against you (sued you) or threatened you with bankruptcy before you entered into the debt agreements.
Unmanageable debt is any debt that you cannot pay by the due date, or within a reasonable period of time after the due date. What is considered a “reasonable time” depends on the type of debt and the type of creditor. “Reasonable time” can be determined by government legislation, by an agreement made between you and the creditor (such as a hardship agreement), or by a contract that you signed with the creditor (such as the contract signed when taking on a loan, commissioning a service, or agreeing to pay a fee).
Some debts, such as mortgages and car loans, are secured against property that you own. This means that the creditor has the right to sell the property to recover the debt, if you do not pay at the agreed upon time.
Other debts, such as credit cards and council rates, are not secured against any property.
Sometimes, several different court proceedings take place before you are declared bankrupt in the Federal Court.
Before asking the court to make you bankrupt or before asking the court for a Warrant for Seizure and Sale, the creditor may have taken you to a Local Court (sued you) in order to get a judgement that forced you to pay the debt. When a creditor starts this process, you are sent a document called a Statement of Claim, which sets out how much money the creditor claims you owe them and the reason why they are making the claim.
A notice of defence is a document that is filed and served by a defendant (the debtor) if they wish to dispute a claim brought against them in court. In debt matters, the debtor may file a notice of defence if they want to challenge any of the claims made by the creditor taking them to court (such as the amount owed), or if the debtor believes that a different type of defence applies to them (such as unfair terms in the contract establishing the debt).
If the debtor does not file a notice of defence, then the creditor may act as though the debtor does not want to defend the claim, and ask the court to make a decision without the debtor there. This is called a “default judgement”.
Debt collectors are different organisations to the creditor. Creditors can engage debt collectors in two ways:
The creditor can sell your debt to the debt collector. This means that the creditor transfers their right to recover the debt to the debt collector. This means that you no longer owe the original creditor any money, and the organisation that you owe money to is the debt collector. You must engage directly with the debt collector instead.
The creditor can engage a debt collector to contact you on the creditor’s behalf. This means that the original creditor is still the person or organisation to whom you owe the debt, and you can still contact the original creditor directly.
Coercive control is a pattern of controlling and manipulating behaviours within a relationship. Examples of behaviour within a relationship that amount to coercive control include:
If you are in an unsafe situation, there are services that can help:
If this brings up feelings that are hard to manage, it can help to talk to a professional about how you are feeling. These services have trained professionals that can talk to you over the phone or online:
An act of bankruptcy is an act that a person commits which a creditor can then rely upon to ask the court to make you bankrupt.
When you enter into a Debt Agreement this is an act of bankruptcy. This is because, if you miss a payment under a Debt Agreement the creditor has the legal right to ask the court to make you bankrupt.
Financial counsellors work with people who are in debt or are not able to meet their ongoing expenses. They:
Financial counsellors help people to:
Financial counsellors have specific knowledge about the credit, bankruptcy and debt collection laws, concession frameworks and industry hardship practices. They’re also trained in negotiation and counselling and offer emotional support and a listening ear when people really need it.
A lawyer is a person who has studied law, completed practical legal training, and has been ‘admitted’ to the Supreme Court of their state or territory. They can:
A lawyer can give you legal advice. This may include:
A lawyer can represent you (do work for you and speak on your behalf). This may include: