What Happens to Your Debts While You’re Inside?
From credit cards to unpaid fines, understanding your rights and options while incarcerated
Alice Pasquale via Unsplash
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Legal Corner
Generally, debts can be put into two categories.
First, there are private debts (e.g. from a bank, a landlord, a car dealer, or ‘Afterpay’).
Second, there are debts owed to the State (e.g. unpaid fines).
When it comes to private debts, it’s important to know who you need to pay, and how much you owe.
You can ask for an account of your debts by contacting agencies such as ‘Equifax’ (PO Box 964, North Sydney NSW 2059).
In Queensland, debts are unable to be recovered after 6 years.
Importantly, the National Credit Code (NCC) is a useful tool.
Under the NCC, lenders can be charged if they do not do certain things once a borrower says they are in financial hardship.
If you tell a lender that you are in financial hardship, the lender must:
- respond to you,
- investigate your situation, and
- make a reasoned decision on whether to change the terms of your loan to accommodate the hardship.
If the lender doesn’t respond, or is unfair, you can complain to the Australian Finance Complaints Authority (AFCA) at (Australian Financial Complaints Authority Limited, GPO Box 3, Melbourne, VIC 3001).
Or, you can go to the Federal Court and ask a judge to change the terms of the loan.
The National Credit Code applies everywhere in Australia and can be found in Schedule 1 of the National Consumer Credit Protection Act.
Debts from unpaid fines are different.
In some jurisdictions including Queensland, you can you apply for work or alternative activities to count as payment of a fine debt under a Work Development Order (WDO).
You can also apply for a fine to be waived.
Each state will take into account different circumstances when deciding whether to waive your fine.
While it is important to look at the law that applies where you live, fines might be waived because of:
- Domestic and family violence;
- Special circumstances and unusual hardship;
- Medical reasons; and
- When you have no reasonable prospect of repayment.
To get a fine waived, you will need to write to the issuing agency and explain the reasons why you can’t pay.
Financial Counsellors can help you with debts. Ask if your prison offers financial counselling.
Generally, debts can be put into two categories.
First, there are private debts (e.g. from a bank, a landlord, a car dealer, or ‘Afterpay’).
Second, there are debts owed to the State (e.g. unpaid fines).
When it comes to private debts, it’s important to know who you need to pay, and how much you owe.
You can ask for an account of your debts by contacting agencies such as ‘Equifax’ (PO Box 964, North Sydney NSW 2059).
In Queensland, debts are unable to be recovered after 6 years.
Importantly, the National Credit Code (NCC) is a useful tool.
Under the NCC, lenders can be charged if they do not do certain things once a borrower says they are in financial hardship.
If you tell a lender that you are in financial hardship, the lender must:
- respond to you,
- investigate your situation, and
- make a reasoned decision on whether to change the terms of your loan to accommodate the hardship.
If the lender doesn’t respond, or is unfair, you can complain to the Australian Finance Complaints Authority (AFCA) at (Australian Financial Complaints Authority Limited, GPO Box 3, Melbourne, VIC 3001).
Or, you can go to the Federal Court and ask a judge to change the terms of the loan.
The National Credit Code applies everywhere in Australia and can be found in Schedule 1 of the National Consumer Credit Protection Act.
Debts from unpaid fines are different.
In some jurisdictions including Queensland, you can you apply for work or alternative activities to count as payment of a fine debt under a Work Development Order (WDO).
You can also apply for a fine to be waived.
Each state will take into account different circumstances when deciding whether to waive your fine.
While it is important to look at the law that applies where you live, fines might be waived because of:
- Domestic and family violence;
- Special circumstances and unusual hardship;
- Medical reasons; and
- When you have no reasonable prospect of repayment.
To get a fine waived, you will need to write to the issuing agency and explain the reasons why you can’t pay.
Financial Counsellors can help you with debts. Ask if your prison offers financial counselling.
Date Published
March 11, 2026
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