What happens if you ignore a debt in Australia?

For most Australian consumer debts, the escalation path runs roughly as follows. There are off-ramps at every stage, and most matters end well before the later steps.

Stage 1: Internal chase (days 1-60)

Reminders, calls, emails. The original creditor's accounts team chases you directly. Friendly at first, firmer over time.

Off-ramp: Pay it. Set up a plan. Apply for hardship if you genuinely can't pay.

Stage 2: Formal demand (days 60-90)

A more formal letter or notice. May come from the original creditor or from an assigned recovery agent.

Off-ramp: Same options, plus dispute if the debt is wrong.

Stage 3: External recovery (days 90+)

Debt is referred to a recovery agency (or platform). Branded outreach — sometimes as the original business, sometimes as the agency.

Off-ramp: Same options, plus AFCA if you're being treated badly.

Stage 4: Default listing (after 60 days past due, debts $150+)

After two written notifications and the statutory waiting period, the debt can be listed on your credit file. Stays for 5 years.

Off-ramp: Pay it (still listed but as “paid default” — better than unpaid). Dispute if the listing requirements weren't met.

Stage 5: Court action (typically 6 months+)

For debts the creditor thinks are worth pursuing, a Statement of Claim or tribunal application. You get formally summoned.

Off-ramp: Engage with the legal process. Settle or defend. Don't ignore court papers — default judgment is the worst outcome.

Stage 6: Enforcement

Garnishee orders against wages, examinations, property attachment in extreme cases.

Off-ramp: Fewer at this stage; act earlier.

Why ignoring rarely works

The debt doesn't go away. It compounds with fees, interest (if contractually allowed), and credit-file impact. Engaging early gives you the most options.