Banks will have to contact a customer to try and find a solution to an overdue debt, such as consolidation or hardship support, before selling the debt to a debt buyer.This is one of the provisions in new guidelines announced by the Australian Banking Association yesterday. The ABA claims its new rules for dealing with debt collection agencies are a "a major step up in safeguards" for vulnerable customers.Other provisions include not selling a debt that is in dispute, only contracting with debt collectors that follow regulatory codes and requiring debt collectors to consult with the bank before petitioning for bankruptcy.If a customer has an ongoing vulnerability, with no reasonable prospect of the debt being repaid, the bank will not sell the debt.The ABA's move follows the release in August of a survey of financial institutions that use bankruptcy petitions in pursuit of unpaid debts. It highlighted a number of companies that are particularly aggressive in the way they deal with debtors.Financial Counselling Australia, Financial Rights Legal Centre and Consumer Action Law Centre reviewed applications by creditors in the Federal Court to put debtors into bankruptcy over the past four financial years.In their report, Who is Making Australians Bankrupt?, they argue that some creditors are overusing the enforcement process.The top three debt collectors applying to make people bankrupt were Lion Finance (512 applications in 2018/19), CCC Financial Solutions (28 applications) and Complete Credit Acquisitions (20 applications). Lion Finance is part of the Collection House group.The report says: "A few debt collectors are regularly and persistently making people bankrupt. This is clearly a deliberate policy decision. Such a decision is inconsistent with a best practice approach to working with people in financial hardship."American Express made 119 applications. Its applications have increased over the years.Another group whose applications have increased is BMW Australia Finance, which made 23 applications in 2018/19 - up from 15 in 2017/18 and 10 in 2016/17.Among the big four banks, Commonwealth Bank made seven applications, Westpac one, NAB one and ANZ none. The review found that there was a downward trend in applications for bankruptcy by the big banks.The report says: "Some organisations that engage in debt collection have never or rarely applied to make people bankrupt. This shows that it is possible to run debt collection processes without making people bankrupt."ABA chief executive Anna Bligh said in a media release: "Under the new guidelines banks will rigorously audit debt collections to ensure customers are being treated fairly and with appropriate care."They'll have the option to buy back debt before any bankruptcy proceedings begin."The new guidelines also oblige the banks to review their bankruptcy thresholds. Consumer groups and financial counselling services have complained that a person can be bankrupted for as little as $5000 and they have called on the Attorney-General to raise the threshold to $50,000.