Trouble with debt

Help with debts

If your debts are getting out of control or you are struggling to make ends meet, it's important to act quickly. Help is available.

Here are some practical steps to ease the stress and get your finances back on track.

1. Talk to your credit provider

2. Apply for a hardship variation

3. Ask for help

Talk to your credit provider

If you are finding it hard to keep up with utility bills (electricity, gas, phone or water), credit cards or loan repayments, the first step is to talk with your credit or service provider and let them know you are experiencing financial hardship.

Taking action straight away can stop a small problem from becoming a big one.

Many companies have hardship officers who can assess your situation and work out what help is available. Whether they can help you will depend on why you are having difficulty making payments and how long you think your will financial problems will continue.

Hardship officers can also help you work out an affordable payment plan such as paying bills in instalments or temporarily altering your loan repayments.

These webpages give guidance on particular debt issues:

1. Utility bills

2. Credit cards

3. Credit reports and credit repair

4. Home loans

5. Joint loans

6. Debt consolidation

7. Fines

8. Travel debt

9. Debt agreements


11 Repossessed goods

12.Helping a friend or family member in financial hardship

Apply for a hardship variation

If you can't keep up with repayments on your credit cards or loans (for example, because of illness, unemployment or changed financial circumstances), ask your credit provider for a 'hardship variation'.

For a home loan, depending on when you took it out there are different thresholds (maximum amounts allowed) for accessing a hardship variation,

How to apply for a hardship variation
  • Contact your lender or credit provider - by phone or in writing

  • Ask to speak to a 'hardship officer' or to 'customer service'

  • Give the details of your loan (account name and number, and the amount you pay each week/fortnight/month)

  • Say that you want to change your loan repayments because you are experiencing hardship (as set out in section 72 of the National Consumer Credit Code)

  • Explain why you are having difficulties making payments, how long you think your financial problems will continue and how much you can afford to repay

When you apply for a hardship variation, the credit provider must respond to your request in writing within 21 days letting you know the outcome of your hardship request (unless you need to provide them with more information). If the credit provider asks you for more information to help them make a decision, you must give this to them within 21 days. Remember that credit providers have a legal obligation to respond to you if you are having problems paying your loans.

How you can change your repayments

Here are some of the options you could discuss with your lender:

  • Extend your loan period, so you make smaller repayments over a longer period

  • Postpone your repayments for an agreed period

  • Extend your loan period AND postpone your repayments for an agreed period

  • Other ways to make your loan repayments more affordable

When negotiating a repayment plan, make sure you can afford it. There is no point agreeing to an amount that is too high for you to pay.

If you find you can't stick to the new arrangement, tell your credit provider straight away. Keep paying as much as you can afford, even if it is not as much as the credit provider is asking for.

You can complain

If your credit provider refuses your hardship application, they must give reasons. If you are not happy with their response you can ask to speak to their internal complaints section.

If you are still not satisfied with the outcome, you can lodge a dispute (for free) with your credit provider's external dispute resolution (EDR) scheme - either the Financial Ombudsman Service (FOS) 1300 780 808 or the Credit and Investments Ombudsman (CIO) 1800 138 422.

Ask for help

You don't have to go it alone. There is free and confidential help available to assist you to get a clear picture of your situation and understand your options:

Get a debt assessment - Use the Debt Self Help Online Assessment Tool from Financial Counselling Australia to get a tailored assessment of your situation. The tool gives you tips on how you can manage your debts.

Financial counselling: A free service offered by community organisations, community legal centres and some government agencies,

Free legal advice: Available from community legal centres and Legal Aid offices in each state and territory, see free legal advice.

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Tel: 0424 513 740
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