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What legal options are there to deal with financial hardship?

The rise in cost of living is constantly in the news, and this week there are reports that more people have fallen behind on their mortgages.  Many people still aren’t aware that the law provides options for people facing financial hardship and having trouble paying mortgages, loans and bills for essentials like electricity and telephone.

Asking for special consideration because of financial hardship is a much better option than some of the other things people do when they are having trouble paying their bills – like putting even more on the credit card, or even taking out a pay day loan.

If you have a loan that is covered by consumer credit laws, you have the right to seek a variation to your loan in the case of financial hardship.  A variation might be something like stopping or  reducing your repayments for a short time, or extending the term of the loan.   A hardship variation is suitable where your financial hardship is caused by a change in circumstances that is likely to be temporary and you can see a way through to being able to get back on track.  There are some conditions that apply, for example the size of the loan.

If your lender refuses your application for financial hardship, you can take your case to the Financial Ombudsman Service.  Doing this stops your lender from taking any action against you in court or repossessing your property until your case has been dealt with by the Financial Ombudsman Service.

It’s not easy to afford legal advice when you are facing financial hardship, so here are some links to other sites that might be useful.  If you need more than the information you find here you can check out your options for free legal advice.  If you still need more help you can contact us and we can talk to you about whether it is worthwhile for you to get some advice from us

Credit Hardship Variations – Information from MoneyHelp

Electricity Hardship Variations – Information from the Queensland Council of Social Services

Telecommunications Hardship Variations – Information from the Australian Communications and Media Authority

Finding a financial counsellor – Information from Financial Counselling Australia