The attacker had checked with security guards the Albury hotel’s CCTV cameras did not extend to the toilets before confronting his victim on the night in early 2014.

The subsequent attack left the man knocked out and slumped in a toilet cubicle with a broken nose, missing his wallet.

Margetson pleaded guilty in Albury District Court to aggravated burglary and was told he was possibly facing more jail than the year already spent on remand.

His barrister told the court the debt collection was on behalf of Lucas Williams, who had been his friend since childhood and was also in the toilets at the time.

Judge Chris Hoy said Margetson decided to go “whack” when he discovered he could isolate the man in the toilets without cameras.

“That's the misguided hero your client tried to be by smashing this guy in the face,” he said.

“There's a sense of premeditation, someone's been rolled in the local pub.”

Williams also pleaded guilty to being an accessory after the fact, by helping Margetson slip away.

But barrister David Barron denied the victim had owed his client any debt.

“It was in (Margetson’s) interest to invent some Robin Hood motivation.”

A medical report stated Margetson had a history of self-medicating with cannabis and amphetamine, but had stopped two years ago.

He was also stabbed multiple times with a shiv in custody, which the doctor said could have exacerbated his post traumatic stress disorder.

The case was adjourned for six weeks for Williams to be assessed for an intensive corrections order, but he still faced the possibility of jail.