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.
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
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:
Apply for a hardship
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
For a home loan, depending on when you took it out there are
different thresholds (maximum amounts allowed) for accessing a
hardship variation, see hardship threshold.
How to apply for a hardship variation
- Contact your lender or credit provider - by phone or in
- Ask to speak to a 'hardship officer' or to 'customer
- 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
Sample hardship letters
The Financial Rights Legal Centre have a sample letter generator to help
you creating professional and legal letters to send to
financial service providers like banks, creditors and insurance
How long should the lender take to respond?
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
- Extend your loan period, so you make smaller repayments over a
- Postpone your repayments for an agreed period
- Extend your loan period AND postpone your repayments for an
- 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
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
Case study - Megan seeks help
a single mum with two kids. She has been struggling to pay her
bills for a while and her credit card payment is now two weeks in
Megan's friend suggested she see a financial counsellor. Megan met
Jenny, her local financial counsellor, and Jenny was able to help
her negotiate a repayment plan with her credit card provider and
work out a plan to manage her other bills.
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
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) 1800 367 287 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:
Financial counselling: A free service offered
by community organisations, community legal centres and some
government agencies, see financial counselling.
Free legal advice: Available from community
legal centres and Legal Aid offices in each state and territory,
If you're in a crisis and need emergency relief or emotional
support see our urgent money help
If some of your financial problems are due to another person
running up debts in your name, or pressuring you to spend money or
sign up for a loan, you may be experiencing financial abuse. Visit
abuse webpage for a list of organisations that can help
Debt solution companies
It might sound like a good idea to pay someone to help fix
your credit history, but credit repair agencies and debt solution
companies may not always be able to do what they claim. Find out
solution companies can and can't do for you.
Money problems are stressful but you do
have options. Take action now by talking to your credit or service
provider and working out a plan to get yourself back on track. You
can apply for a hardship variation if you need to, or get help from
a financial counsellor.
Last updated: 03 Jan 2018