Many debtors believe that ignoring a debt collector will make the debt go away. It won't — but understanding what actually happens when contact is ignored helps creditors understand why early professional placement matters and what options remain when a debtor goes silent.
Stage 1: Initial contact
When a debt is placed with a collection agency, the first contact is usually a letter, SMS, or email informing the debtor of the outstanding amount and offering a resolution pathway. Under ASIC's RG 96 guidelines, collectors in Australia must operate within specific contact windows (Monday–Friday 7:30am–9pm, Saturday 9am–9pm) and cannot contact more than three times per week. A non-responsive debtor will receive contact across multiple channels within these constraints.
Stage 2: Escalated contact
If the debtor doesn't respond to initial contact, collectors escalate — more frequent contact attempts (within the legal limits), phone calls to any known numbers, and in some cases, SMS messages to known contacts where permitted. A formal letter of demand is typically issued at this stage, setting a specific payment deadline and referencing the legal consequences of non-payment.
Stage 3: Legal action
If the debtor continues to ignore contact, legal proceedings become the next step. For NSW debts under $40,000, this typically means an application to NCAT's Consumer and Commercial Division. For larger debts, the NSW Local Court or District Court. Legal proceedings are a formal step — the debtor receives court documents at their registered address, and if they don't respond, the creditor can obtain a default judgment.
What a judgment means for the debtor
Once a court judgment is obtained, the creditor has significantly more power:
- Garnishee orders — the court can direct the debtor's employer to deduct payments from wages
- Bank account garnishee — funds can be taken directly from the debtor's bank account
- Property writs — for very large debts, the court can authorise a writ of levy against property
- Credit bureau listing — a judgment is a matter of public record and will appear on the debtor's credit file
- Examination orders — the court can compel the debtor to attend and disclose their assets
What collectors cannot do in Australia
Under the ACCC/ASIC Debt Collection Guideline, Australian debt collectors have significant restrictions:
- Cannot contact the debtor outside permitted hours
- Cannot contact more than 3 times per week (or 10 times per month)
- Cannot use threatening, abusive, or misleading language
- Cannot contact an employer unless for address verification or wage garnishment
- Cannot contact third parties to pressure the debtor
- Cannot claim to be a government agency or lawyer (unless they are)
- Cannot misrepresent the legal status of the debt
The practical takeaway for creditors
A debtor who ignores contact faces an escalating path to legal action. The limitation period is running — the longer contact is ignored, the closer the debt gets to becoming statute-barred. Placing accounts with a professional collection agency early gives the debtor a professional, compliant contact experience that is more likely to produce a response than internal follow-up.
Recovia's digital-first contact approach — SMS, email, and the debtor's own self-service portal — achieves response rates significantly above industry average. Commission-only. Place your outstanding accounts today.