Life happens, and sometimes it can take an unexpected turn. You are suffering from financial hardship if you are struggling to make ends meet, and finding it hard to pay your utility bills or to meet your loan repayments because of the following circumstances:
- Changes in your financial circumstances
- Relationship breakdown
- Other similar conditions that made it difficult for you to pay for your financial obligations
What To Do When You’re Suffering From Financial Hardship
Australians with financial hardship are advised to do the following:
- Talk to your credit provider – Let your creditors know that you are having financial hardship and that you want to come to an agreement with them. If your credit provider has given you an option which you think is unfair, ask them to review their decision.
- Apply for a ‘hardship variation’ – Check if you met the threshold allowed for accessing a hardship variation. Those who entered into a credit contract prior to March 2013 can file a hardship application to their provider if the amount borrowed is less than the maximum amount allowed. If you obtained a loan/debt on or after March 2013, you are qualified to apply for a hardship variation regardless of the value of your debt. Some credit providers still agree to vary the contract even if the loan is above the threshold, so it is still advisable to present your problem to your creditor.
- Negotiate the terms of your loan and let them know that you want to find reasonable and convenient ways to pay off your debts. If your lender has hardship officers, they will make an assessment of your financial situation and work out what options are available. They will help you based on your capacity to repay and your opinion on how long your financial issues will continue. The hardship officers will either alter your payment schedules or let you pay bills in smaller installments. They will also explore every option available to ensure that you can enjoy an affordable payment plan.
Other Options To Consider
Financial hardship is an option for borrowers who want to repay their debts but are financially incapable of doing so. If they were not able to negotiate an arrangement with their credit provider that is the time that they can legally apply for a hardship variation. It is a formal process where you can formally ask your credit provider to change the terms of your loan agreement.
For example, if you obtained a mortgage from X Company you have the following options – Ask X Company to:
- Lower your monthly repayments by extending your loan period without varying your interest rate
- Give you sufficient time to repay your loans by postponing your repayments for a specified period
- Postpone your loan and lower your monthly payments
- Other options to make your payments more affordable
The credit providers are obliged to respond to your hardship variation request in writing within 21 days after the receipt of your application. Speak to the creditor company’s internal complaints section when your creditor refuses your hardship application. It is your right as a debtor to negotiate the terms of your loan and ensure that the credit provider affords you with proper assistance when your debt gets out of your control. If they reject your hardship application, they should explain why they did so. Otherwise, you can talk to their internal complaint’s section and ask for clarification. If you think they treated you unfairly, or they were not able to give justifiable reasons for their refusal, you have the option to file a dispute with your credit provider through any of the following offices:
- Financial Ombudsman Service or
- Credit and Investments Ombudsman
*You can check the Australian Securities and Investment Commission for more details on the loan thresholds.
Clean Your Credit
We all know that your credit score plays a huge role in determining whether or not you can avail of the lowest possible monthly payments, interest rates, and loan delivery fees In fact, the higher it is, the lower the loan cost. A reputable credit repair services like Clean Credit can drop those loan terms as low as possible and put extra money in your pocket, without going through another costly loan. Clean Credit will do its best to remove derogatory items such as bankruptcies, charge-offs, collections, foreclosures, late payments, repossessions, tax liens, and other inaccuracies from your credit reports. Financial problems are overwhelming but you have options. Take action now by getting a credit repair company to help you fix your credit score, and get the access to affordable loan products that can help you get out of debt. Talk to the in-house credit repair specialists of Clean Credit today to learn more about how repairing your credit can help you out of a financial hardship.