Lost our Job?

Losing your job can be very traumatic.
It throws your whole financial plan into chaos and can create a lot of extra worry and stress upon yourself and your family.

You're not on your own as there are rules, guidelines and regulations that may assist you if you are in financial difficulty.

If you are having difficulty in making your loan repayments then you may be able to change your repayments on the grounds of hardship under section 72 of the Credit Law.

As a consumer you have a rights under the Credit Law to access repayment arrangements because you are in financial difficulty.

If you are in financial difficulty because you were given a loan you could not afford when it was given you should seek advice on whether you have a case for an unjust contract.

When you ask for hardship assistance from your creditor you should:
• Tell them that you are in financial hardship.
• Explain what has put you in financial hardship.
• Make sure you have a proposal to address the situation, it is really important that you have a plan.
• Make sure you keep details of the phone conversation including the name if of who you talked to, what happened, the date and the time.
• Ask to be referred to the financial hardship team (if there is one).
• Don’t agree to arrangements you cannot afford— If the arrangement being offered won’t work for you then consider writing to the credit provider or get advice.

To be eligible for assistance from your creditor:

The Credit Law must apply to your loan as follows. If you are unsure about this you can contact Financial Rights Legal Centre or phone 1800 007 007.
• You must be unable to pay because of illness, unemployment or other "reasonable cause".
• You must show that if the variation is granted you will be able to repay your loan within a reasonable time.
• A hardship variation can be made at any time but preferably before court proceedings have commenced. If court proceedings have commenced you should get urgent legal advice.
• Your loan (or credit limit) must be under a certain amount (threshold):
a) $500,000 (if entered into after 1 July 2010).
b) If loan entered into before 1 July 2010 a floating threshold applies As at 29 March 2010, the applicable threshold was $350,240. The current threshold is available at:

NOTE: if your loan is over the threshold you can still get help through External Dispute Resolution (EDR).
Since the New Credit Law came in you have access to help even if the creditor says that you can’t get help or you loan is not covered by the hardship provisions or is over the threshold.

You have a right to go to the independent umpire under External Dispute Resolution (EDR). Depending on who your loan is with this will be either (click on the link below):

o Financial Ombudsman Service (FOS)
o Credit Ombudsman Service Limited (COSL)

If you are in financial difficulty you should immediately contact your credit provider.
If you get no satisfaction, that takes your circumstances into consideration, the you should seek help from a financial counsellor, community worker, community legal centre or credit lawyer.

The Consumer Credit Legal Centre in NSW (CCLC(NSW)) has produced a series of useful fact sheets including one on financial hardship http://financialrights.org.au Tel: 1800 007 007.

If you don’t talk to your creditors they won’t know you are sick and they will treat any non-payment of the loan as a default.
This may result in legal action or repossession of the mortgaged goods, if it is a secured loan. 

If you are sick you should:
• Contact www.humanservices.gov.au about any benefit you may be entitled to.
• Get legal advice if you think you have been unfairly treated by your employer.
• Talk to your creditors.
• Do a money plan or budget to work out what you can afford.
• Check that you have received all your entitlements, get advice if you believe you have not. 
• Consider making a formal hardship application or go to EDR if your creditor refuses to negotiate.
• Talk to a financial counsellor if your creditor refuses to negotiate a realistic payment plan.

Working out my Budget/What can I Afford

To work out what you can afford you should do a money plan or budget.

The Lismore Neighbourhood Centre has a Budget Counselling Service.

There are a number of really useful tools to help you work out where your money goes.

Money Smart.

For Centrelink Advice on Benefits.

If you are having problems with Centrelink contact the Welfare Rights Centre.

The Financial Rights Legal Centre has produced a range of useful fact sheets on credit and debt issues and financial hardship.

Employment rights, for information contact:

o Your Community Legal Centres in NSW
o To find your local Community Legal Centre
o Northern Rivers Community Legal Centre

If your lender refuses your application for a hardship variation or does not respond you have a right to go to the independent umpire under External Dispute Resolution (EDR). Depending on who your loan is with this will be either (click on the link below).

o Financial Ombudsman Service (FOS)
o Credit Ombudsman Service Limited (COSL)