Money, debt and fines
Debt refers to money owed by one party (the debtor) to another party (the creditor).
Debt is a standard part of modern life, but unmanageable debt can lead to significant problems. Debt problems can arise with unexpected bills or expenses, like a high phone bill or a claim for damages after a car accident.
If you’re unable to pay your debts as they fall due, a creditor may choose to take you to court. Depending on the type of debt, different rules apply regarding recovery and enforcement processes. In NSW, most formal debt recovery action against the average debtor takes place in the Local Court.
Debt
Debt refers to money owed by one party (the debtor) to another party (the creditor). Debt arises through a variety of everyday transactions, including:
- money owed to a business or individual for the supply of goods or services
- a consumer credit agreement (such as a mortgage, personal loan or credit card)
- a compensation claim (such as an order for damages following a car accident)
- fines or court judgments
- government requirements (such as tax, child support and Centrelink debt).
Owing money is not unusual, but it can become a problem if you’re unable to pay your debts when they fall due.
Online books
The Find Legal Answers Tool Kit is a collection of plain English books about the law. You can read them online or at your local public library.
Use the Tool Kit online books below to find information about debt.
Dealing with debt: a legal guide to personal debt in nsw
A guide that helps debtors understand common types of debt and debt recovery processes, consider alternatives for managing debt issues, and respond to debt recovery action in the Local Court of NSW.
- Read Chapter 2: Understanding and managing debt
- Read Chapter 3 Debt collection
- Read Chapter 8: Other types of debt
- Read Chapter 9: The Local Court of NSW
- Read Chapter 10: Responding to a statement of claim
- Read Chapter 11: Small Claims Division
- Read Chapter 12: General Division
- Read Chapter 13: Judgment
- Read Chapter 14: Enforcement
- Read Chapter 15: Stopping enforcement
- Read Chapter 17:Sample templates and letters
- Read Chapter 18: Sample forms
The law handbook: your practical guide to the law in NSW
A practical guide to the law.
Guided pathways
The Legal Aid NSW guided pathways help you find the best way to deal with your legal problem.
Useful links
Legislation
The Civil Procedure Act 2005 is the main NSW Act dealing with debt collection. It is only possible to enforce or defend a debt by complying with the Act as well as the court rules, and by using the proper court forms.
Fines
Fines can cause financial problems because they’re usually unexpected and not factored into household budgets. Revenue NSW is responsible for collecting most unpaid fines. NSW Police, Sydney Trains, local councils, hospitals and universities are examples of the agencies that use Revenue NSW as a processing service for fines.
It’s essential to pay fines as early as possible, because failure to pay or address fines will lead to recovery action by Revenue NSW.
Online books
The Find Legal Answers Tool Kit is a collection of plain English books about the law. You can read them online or at your local public library.
Use the Tool Kit online books below to find information about fines.
Dealing with debt: a legal guide to personal debt in nsw
A guide that helps debtors understand common types of debt and debt recovery processes, consider alternatives for managing debt issues, and respond to debt recovery action in the Local Court of NSW.
Fined out
A practical guide to the NSW fines system.
Useful links
Legislation
The Fines Act 1996 deals with fines in NSW.
Bankruptcy
If you don’t have enough assets or income to pay your debts as they fall due, you may consider taking formal action to help manage your creditor(s).
Bankruptcy is a legal process where the debtor hands over control of their property and finances to a trustee, who tries to repay as much debt as possible and protects the debtor from further action by creditors.
Online books
The Find Legal Answers Tool Kit is a collection of plain English books about the law. You can read them online or at your local public library.
Use the Tool Kit online books below to find information about bankruptcy.
Dealing with debt: a legal guide to personal debt in nsw
A guide that helps debtors understand common types of debt and debt recovery processes, consider alternatives for managing debt issues, and respond to debt recovery action in the Local Court of NSW.
The law handbook: your practical guide to the law in NSW
A practical guide to the law.
Useful links
Legislation
The law on bankruptcy is found in the Bankruptcy Act 1966 (Cth). This Act applies throughout Australia.
Government debt
If you owe money to a government department, it is important to understand the debt recovery processes that apply. There are processes to request relief including paying by instalments and requesting a review.
Online books
The Find Legal Answers Tool Kit is a collection of plain English books about the law. You can read them online or at your local public library.
Use the Tool Kit online books below to find information about bankruptcy.
Dealing with debt: a legal guide to personal debt in nsw
A guide that helps debtors understand common types of debt and debt recovery processes, consider alternatives for managing debt issues, and respond to debt recovery action in the Local Court of NSW.
The law handbook: your practical guide to the law in NSW
A practical guide to the law.
Useful links
Getting help
Legal Aid NSW, community legal centres and other organisations may give free legal help to people with a legal problem in NSW.
Find more sources of help on the Getting help page.
For Aboriginal people
Legal information at the State Library
The Library has a large collection of textbooks, legal commentaries, legal encyclopaedias, databases, journals, legislation and court reports - everything you need for advanced legal research.