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What happens if I can’t pay my bills, loans or other debts?


What is a financial hardship?


Financial hardship is where you find it hard to make the payments on your mortgage, loans, credit cards, telephone bills or utility bills such as your electricity or water.


Does it matter why I am in financial hardship?


Financial hardship can be caused by a range of circumstances including illness, loss of your job and a health pandemic. The reason you are in financial hardship does not affect your ability to ask your credit, telephone or utility provider (service provider) for help.


How do I ask for financial hardship?


Asking for help is difficult. There are no magic words you have to say when you ask a credit provider for help. It is enough that you say to them “I need help.”


When I ask for financial hardship what will the service provider want from me?


If you ask a service provider for help, it is likely that they will ask you for more information about your financial circumstances. The type of information they will ask you for includes:

(a) A statement of financial position (SOFP). This is a document where you will be asked to set out what your current income and your current expenses (including your other debts) are.

(b) Copies of your bank statements.

(c) Statements from Services Australia (Centrelink) if you are currently receiving a payment from the government.


This information is important because it allows you and your service provider to work out what you can afford to pay towards your loan or debt while you are in financial hardship.


How long does financial hardship last for?


Financial hardship does not last forever and does not lead to a permanent change in your obligation to pay a loan or a bill. Financial hardship is designed to assist you out of a temporary change in your circumstances so that you can continue to meet your financial obligations once those circumstances improve. Financial hardship does not assist you if your circumstances have permanently changed.


What sorts of things can I ask for under financial hardship?


The types of outcomes that a service provider might offer if you ask for financial hardship are:

(a) A period of time where they agree to accept reduced or no payments being made.

(b) A period of time with reduced or no interest.

(c) An extension of the time to pay the loan.

(d) In the case of a mortgage, an opportunity to sell the property or asset that is mortgaged yourself.

(e) A life tenancy. This means an older person can live in a property until they die and then the house is sold.


Can I receive a default on my credit report if I am in financial hardship?


If a default has not already been listed on your credit report when you ask for financial hardship, the credit provider is not allowed to list a default. However, there may be a note made on your credit report which indicates you are in financial hardship. You should seek legal advice about this.


Are all service providers required to give me financial hardship?


There are some service providers like Body Corporates, local councils and some credit providers who are not required by law to consider a request for financial hardship. However, this should not prevent you from asking them for help and seeing what assistance they are able to provide to you.


Will the service provider waive the debt that I owe?


A service provider waiving a debt is not a usual outcome of you asking for financial hardship. However, some companies do have policies that are separate to their financial hardship policies where they will consider requests to waive your debt if your circumstances have permanently changed and there is no prospect of you ever returning to work or paying the debt off.


Will a lender waive my mortgage or loan debt and allow me to keep my house or my car?


Requests to waive a mortgage debt or a loan for an asset such as a house will not be considered unless you have already sold the house, car or other asset and there is still money owing on the loan.


English is not my first language, will the service provider provide me with an interpreter?


Yes, your service provider should provide you with an interpreter. If you are not provider with an interpreter, insist on an interpreter being obtained by the service provider before the conversation continues.


What if my service provider says no or does not give me the help I need when I ask for financial hardship?


If you are concerned about being able to pay your bills, mortgage, loans or other credit products, you should follow these 3 steps:

1. Approach your lender, telephone or utility provider and ask for help. 2. If you do not get the help you need you should complain to the company’s internal dispute resolution area. 3. If you are still unhappy you should lodge a complaint with the relevant complaint body such as the Australian Financial Complaints Authority, Telecommunications Industry Ombudsman or Energy and Water Ombudsman Queensland.


Australian Financial Complaints Authority www.afca.org.au Phone: 1800 931 678.

Telecommunications Industry Ombudsman www.tio.com.au Phone: 1800 062 058.

Energy and Water Ombudsman Queensland www.ewoq.com.au Phone: 1800 662 837.


Where can I get help if I have a problem with my service provider or I can’t talk to my service provider on my own?


You can get help by calling:

· a financial counsellor on 1800 007 007

· Legal Aid Queensland on 1300 65 11 88.



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