It is no secret that being unable to repay debts can be stressful. No one wants to be stuck in a position where repayments become a problem. But this is a situation where many individuals suffer. It may be caused by poor handling of finances or economic crisis, like job loss. There are circumstances in this life that are inevitable.
But how do you deal with financial stress? A sudden loss of job and having a hard time finding a new source of income, it could be because of various reasons like retrenchment. This is a turning point where most people fail to repay debts.
Missing a payment or failure to pay on time has consequences. Expect the interest to go higher, which makes it more difficult to pay in the long run. Some people apply for a new loan in order to pay debts and this is where debts start to pile up and becomes a never-ending cycle. Applying for a new loan is not always the solution to the problem.
The National Hardship Register
The good news is that the National Hardship Register offers help to those who cannot repay their debts. Listed individuals who are under this program will have their debts waived after three years, provided that consumers remain listed for that period of time. This is great news to those who cannot repay their debts.
Who Is Qualified For The National Hardship Register?
The National Hardship Register (NHR) is a joint initiative between the Australian Collectors and Debt Buyers Association Limited (ACDBA) and the community sector to address the serious issue of long-term and severe financial hardship experienced by a small but growing number of vulnerable consumers.
Consumers who are in extremely serious circumstances and can’t afford to pay their debts.
What does the process involve?
How to qualify? Consumers are assessed by financial counsellors, which require a meeting to identify if the consumer does not have the capacity to pay.
What are the types of loans accepted in this program?
The National Hardship Register only applies to people with unsecured loans – electricity/utility bills, credit cards and telecommunication bills. It does not cover a mortgage secured by property for example.
What happens after registration?
Once you are qualified, debt collectors will stop calling and chasing you.
National Hardship Register is seen as a more favourable option rather than engaging in debt agreements or voluntary bankruptcy. Financial counsellors warned those who are in debt to be careful when dealing with companies that provide services like debt repair or debt consolidation. These companies charge high fees for their services. It is not illegal to charge upfront fees but the thing is, consumers, can do it by themselves or some of the work needed can be availed free of charge. If the consumer is clueless, he or she will have to pay for a service that is free through financial counsellors.