What are your rights when you can’t pay off your debt in time?

What rights do you have when a debt collector is demanding money from you?

The creditor — the person you owe money to — will usually hire a debt collector to collect the money that you owe.

If you have a written contract with your creditor it explains what will happen when you don’t pay. The creditor can charge you late fees and collection fees if they told you about the fees before you made the agreement with the creditor.

These cover the costs of contacting you and trying to collect the money. These fees should be reasonable.

If you don’t think you owe the creditor, or you don’t think you owe that much you need to do something about it. Don’t ignore it.

* Tell the creditor and the debt collector that you don’t agree with the debt. The debt collector may decide not to pursue you while the dispute is being sorted out.

* If you can’t resolve the dispute you can go to the Disputes Tribunal to ask for an order to say you are not responsible for the debt.

Creditors may have taken security over your property in your contract with them.

If they have security they have probably included in the contract the right to repossess the goods if you stop paying.

If you are having trouble paying debts you can discuss your options with a budget advisor, phone 0800 345 123. If there is no way that you can pay your debts then you may be able to apply for one of several options available through the Insolvency and Trustee Service, phone 0508 467 658.

For free and confidential advice and information on this or any other matter visit the Palmerston North Citizens Advice Bureau in Hancock Community House, 77 King St. Opening hours: MonFri from 9 am-4.30 pm, 357-0647 or 0800 367 222.

We have a free legal advice service by qualified lawyers most Thursday evenings at 7.30 pm, and a JP is available on Tuesdays from noon — 2.30 p.m. No appointment is necessary for either of these services.