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.
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:
You should contact your lender as soon as possible, especially if:
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.
A lender may agree to:
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.
The lender will need to understand your financial situation to be able to consider your hardship request.
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:
If the lender declines your application:
We may deal with your financial hardship complaint in any of the following ways:
We will only direct your lender to change your payments if:
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.
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.
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.
You may make a complaint with CIO if your lender has obtained judgment. However, we can only assist you in limited circumstances.
If a court has entered judgment against you, you are no longer entitled to apply for a financial hardship variation such as a request for a payment arrangement.
We may still be able to assist you in negotiating your proposed payment arrangement with your lender. However, we would be unable to assist you further if your lender disagrees to your payment proposal.
In these circumstances, we may only be able to assist you in negotiating:
We may only ask a lender to stay a judgment or eviction in very limited circumstances. We strongly recommend you urgently obtain legal or financial counselling advice.
For further information about our approach to complaints after judgment has been entered, read our Position Statement 3.
Only in very exceptional circumstances could we require your lender to stop an eviction.
If you have received a notice to vacate, we strongly suggest you seek advice from a financial counsellor or a community legal centre immediately.
For more information regarding our position once a court has entered judgment against you, please read our Position Statement 3.
You are generally entitled to make a financial hardship application on more than one occasion. However, we will take into account whether your circumstances have changed since the previous application.
We consider that a lender should allow a borrower reasonable time to sell the security property if the sale of the property is likely to discharge the loan in full, without a shortfall.
You will need to consider whether it is in your best interest to sell your property to repay the loan. You should seek legal or financial counselling advice to help you make the right decision.
Information that we may ask from you includes:
We consider that a lender should generally allow a borrower reasonable time to refinance where there is a realistic prospect of this or where the financial position of the lender is fully protected because the value of the security property significantly exceeds the outstanding balance of the loan.
You will need to consider whether it is in your best interests to refinance. You may wish to seek legal or financial counselling advice to help you make the right decision.
A borrower can apply to the Department of Human Services (DHS) (including Centrelink) for the partial release of their superannuation funds. Depending on the circumstances, it may or may not be appropriate for you to do this.
If you are considering making an application for the early release of your superannuation funds, we recommend that you first discuss this with a financial counsellor or a community legal centre.
See Centrelink’s website for more information.
If your credit provider declines your hardship application, you may make a complaint to CIO.
Whether you have entered into a lease, a hire purchase agreement, a rental agreement or another type of financial product, we will ask your credit provider to consider your hardship request.
However, we may not be able to direct your credit provider to change your payments terms. We may only be able to ask them to reconsider their decision.
In some circumstances, a small business can make a complaint to CIO. For more information, see Guidelines 22 and 23 in our Guidelines - Fourth Edition.
We consider that a lender should assess the financial hardship application even if it is from only one of the co-borrowers. We may only ask your lender to consider your request if you intend to settle the issue in the Family Court or in another appropriate forum, within a reasonable time.
To find out more about our considerations regarding this issue please read our Position Statement 2.