Hardship Variations
What can I do if I'm having difficulties in making repayments?
If you are
having difficulty in making your loan repayments then you may be able to change
your
repayments on the grounds of hardship under section 72 of the Credit Law.
As a consumer
you have a rights under the Credit Law to access repayment
arrangements because you are in financial difficulty.
If your
financial difficulty is due to you being given a loan you could not afford when
it was given
you should seek advice on whether you have a case for an unjust contract
When you ask for hardship assistance from your creditor you should
· Tell them that you are in financial hardship
· Explain what has put you in financial hardship
· Make sure you have a proposal to address the situation
·
Make sure
you keep details of the phone conversation including the name
of who you talked to, what happened, the date and the time
· Ask to be referred to the financial hardship team (if there is one)
·
Don’t agree
to arrangements you cannot afford— If the arrangement being offered
won’t work for you then consider writing to the credit provider or get advice
To be eligible for assistance from your creditor:
v
The Credit Law
must apply to your loan. If you are unsure about this you can
contact
Consumer Credit Legal Centre
or phone 1800 808 488 (if you live in NSW)
v
You must be
unable to pay because of illness, unemployment or other
"reasonable cause".
v
You must show
that if the variation is granted you will be able to repay your
loan within a reasonable time.
v
A hardship
variation can be made at any time but preferably before court proceedings
have commenced. If court proceedings have commenced you should get urgent
legal advice.
v Your loan (or credit limit) must be under a certain amount (threshold):
· $500,000 (if entered into after 1 July 2010).
·
If loan
entered into before 1 July 2010 a floating threshold applies
As at 29 March 2010, the applicable
threshold was $350,240. The
current
threshold is available at
www.fido.asic.gov.au/credit
NOTE: if your loan is over the threshold you can still get help through External Dispute Resolution (EDR).
Since
the New Credit Law came in you have access to help even if the creditor says
that you can’t
get help or you loan is not covered by the hardship provisions or is over the
threshold.
You have a
right to go to the independent umpire under External Dispute Resolution (EDR).
Depending on who your loan is with this will be either (click on the link below)
· Financial Ombudsman Service (FOS) http://fos.org.au
· Credit Ombudsman Service Limited (COSL) http://www.cosl.com.au/
If you are in
financial difficulty you should immediately contact your credit provider and if
you get no satisfaction
that takes your circumstances into consideration you should seek help from a
financial counsellor,
community worker, community legal centre or credit lawyer.
The Consumer Credit
Legal Centre in NSW (CCLC(NSW)) has produced a series of useful factsheets
including one on financial hardship
http://www.cclcnsw.org.au/
Disclaimer: The
information contained on this web site is of a general nature. It is intended as
a guide and you must not rely
on the information contained on this website for legal purposes. If you have a
legal problem you must seek independent legal
advice from a qualified legal practitioner. To the extent permissible by law,
the Lismore and District Financial Counselling
Service Inc. disclaims all liability for anything contained on or accessed via
this site and any use you make of it.
Please note that some of the information on this website applies to
residents of NSW Australia only.
Original site design was produced with funding from the Sugar Industry Reform Program