Victoria Legal Aid


Debt is money that is owed to another person or organisation through an agreed contract. This topic has information on the legal rights of debitors and creditors and ways to resolve debt.

Debt is money that is owed to another person or organisation. Often, the money will be owed under an agreed contract, whether written or spoken.

A person or organisation in debt is known as a ‘debtor’. A person or organisation that is owed money is known as a ‘creditor’.

Both debtors and creditors have legal rights. There may be reasons why a debtor does not have to pay a creditor in full.

If a debtor cannot repay a debt by an its due date, it is important to seek advice and take action as soon as possible. There are free financial counselling services that can help in dealing with debt. Unpaid debt may result in a creditor seizing assets or taking a debtor to court in order to recover costs.

More information

Debtors' rights

Reasons you might not have to pay your debt

Creditor notices and letters of demand

Debt collection

Options before legal action

Notice of legal action – being sued

See also Debts owed under the Status Resolution and Support Services program.

Other support

Find out how you can get other support for debt and bankruptcy.

Disclaimer: The material in this print-out relates to the law as it applies in the state of Victoria. It is intended as a general guide only. Readers should not act on the basis of any material in this print-out without getting legal advice about their own particular situations. Victoria Legal Aid disclaims any liability howsoever caused to any person in respect of any action taken in reliance on the contents of the publication.

We help Victorians with their legal problems and represent those who need it most. Find legal answers, chat with us online, or call us. You can speak to us in English or ask for an interpreter. You can also find more legal information at

Reviewed 07 April 2022

In this section