Financial Hardship FAQs

Will we ask you for your medical information?

Generally we will not ask you for medical information about your health. For example, we will not ask for a medical certificate to prove the cause of your financial hardship.

However, there may be circumstances where we or your financial services provider may need you to provide us with certain medical information. We will only do this if it is relevant to your financial hardship application. For example, if you have told us that you will be fit to start work again by a certain date, we may ask you for a note from your doctor confirming this.
 
It will not be necessary or appropriate for us or your financial services provider to ask for your entire medical file.
 
Further, if you are receiving a disability support pension, we do not consider it necessary or appropriate for us, or your financial services provider to ask you for a medical certificate confirming your disability.
Will we ask you for your bank statements?

We will generally not ask you to provide us with bank statements in order to verify your income and expenses.

We may, however, ask you to complete a financial hardship questionnaire, which is essentially a statement of your financial position (SOFP).

We will only ask you for bank statements if they are relevant in the particular circumstances.

We consider that:

  • it will not generally be necessary for us to ask you for your bank statements if you or your financial counsellor provide us with a letter from Centrelink confirming your Centrelink income, as well as a completed SOFP to show us your expenses.
  • usually we will only query the information contained in the SOFP if we think it may be inaccurate (for example, if it seems unusual, incorrect or extraordinary).
  • if your SOFP has been completed by a financial counsellor, we will assume that it has been accurately completed.
What to do if I am experiencing financial difficulty

You should contact your lender as soon as possible, especially if:

  • you are unable to meet your loan payments
  • you are finding it difficult to meet your loan payments
  • your financial situation will be changing and you may be unable to meet your loan payments at that time
  • you have received a default notice from your lender.

You should try to make such payments as you are reasonably able to. Please be aware that interest, fees and charges continue to accrue on your loan.

If you are unsure what to do, we strongly recommend that you seek legal or financial counselling advice as soon as possible. Some legal centres may provide you with free legal advice, and financial counsellors provide their services free of charge.

The earlier you approach your lender, the more options they will be able to provide you with. If you are not happy with your lender’s response, you may wish to make a complaint with us.

Further information about our approach to financial hardship complaints can be found in our Position Statement 2 and Position Statement 3

How can my lender help me with my financial hardship?

A lender may agree to:

  • a payment arrangement
  • capitalise the arrears, which would increase your payments
  • postpone your payments for some time
  • extend the term of your loan and reduce your payments
  • give you time to sell the security property
  • any other reasonable proposal that enables you to eventually repay the loan.

If your loan is not a consumer loan (e.g. it is a commercial loan), it may be more difficult to negotiate a favourable outcome.

Further information about our approach to financial hardship complaints can be found in our Position Statement 2.
What information should I give my lender for a financial hardship application?

The lender will need to understand your financial situation to be able to consider your hardship request.

You will need show the lender that your situation is likely to improve and that you will be able to meet your payments if your contractual payment is changed.
 
To demonstrate that your financial situation is likely to improve so you can repay the loan, the lender may require the following: 
  1. why you are in financial hardship.
  2. an explanation of how and when your situation will improve.
  3. what you want from the lender
  4. whether you are able to make some payments and over what period of time, or
  5. a statement of financial position, which sets out your income and expenses, as well as supporting documents.
 
You may wish to use CIO’s Hardship Application Questionnaire, which asks for this type of information.
 
You may also be asked to provide supporting documents, such as:
  • bank account statements
  • pay slips
  • utility bills
  • tax returns
  • Centrelink statements
  • details of debts with other creditors, or
  • (if you are seeking time to sell) an agency agreement or appraisal.
What if the lender has agreed to my request for financial hardship assistance?

If your lender agrees to change your loan payments, it must write to you telling you about the new payment arrangement. Make sure you understand how the new arrangement will work. For example:
 

  • What is the new payment?
  • On what date do you have to start making the new payments?
  • What is the frequency of the new payments?
  • Do you need to change your direct debit authority because the date of payment has changed?
  • If the arrangement is temporary, on what date do you have to recommence your normal payments?
  • If you are not sure about whether or not you should accept the arrangement, make sure you seek advice before agreeing to it.
If your lender offers you a payment arrangement that you’re unsure you can afford, be very careful about accepting it. If you do and then can’t meet the new payments, it may be difficult to later ask your lender for another payment arrangement.
What if the lender has declined my request for financial hardship assistance?

If the lender declines your application:

  • it must write to you and set out its decision and the reasons for its decision
  • you can lodge a complaint with us (if your lender is a scheme participant at CIO).
  • you can contact us on 1800 138 422.
Once we receive your complaint, we will investigate whether we can assist you in asking your lender to reconsider its decision.
 
During our investigation, we may require you to complete and return our Hardship Application Questionnaire. To assist us in our investigation, you may wish to complete and return this questionnaire as soon as you make your complaint.
 
We also recommend that you seek legal or financial counselling advice.
How will CIO deal with my financial hardship complaint?

We may deal with your financial hardship complaint in any of the following ways:

  • refer your complaint back to the lender to give the lender a chance to re-consider its decision
  • negotiate an outcome between you and your lender
  • hold a conciliation conference between you and your lender
  • in certain circumstances, direct your lender to change your credit contract and the payments due under the credit contract.

We will only direct your lender to change your payments if:

  • your loan is covered by the National Credit Code
  • you are likely to be able to repay your loan if it is changed in a particular way.

However, if your financial hardship is long-term or permanent, it may be difficult for you to show us that you will eventually be able to repay your loan.

Should I make payments while my complaint is open with CIO?

While we are considering your request, you should make such payments as you are reasonably able to. If you are seeking a payment arrangement, you should try to make the payments which you are proposing.

Please be aware that interest, fees and charges continue to accrue on your loan while we are considering your complaint.
My lender is taking legal action. What should I do?

If your lender is taking legal action and you are in financial hardship, it is important that you seek legal or financial counselling advice as soon as possible, so that you know what options may be available to you.

If you haven’t already, you may wish to ask your lender for financial hardship assistance.

If you are unhappy with your lender’s response, you may wish to make a complaint with us and in most instances, we can require your lender to discontinue enforcement action while we are reviewing your complaint.

However, only in very exceptional circumstances can we require your lender to stop an eviction.

If a Court has entered judgment against you, we are also limited in what we can do to assist you. This is because once your lender has obtained judgment against you, you are no longer entitled to apply for a financial hardship variation such as a request for a payment arrangement. For more information regarding our position once a Court has entered judgment against you, please read our Position Statement 3.

Please note that interest, fees and charges continue to accrue on your loan while we are considering your complaint.

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