If you are struggling to repay your debts, and finding it hard to make ends meet living wondering how you can afford to pay your next bill or living with constant worry that the credit card will be rejected the next time you are at the supermarket checkout, it's vital that you act quickly and avoid spiraling further into a debt cycle. Help is available to assist you with your delicate situation.
Firstly, you need to prioritize your debts. If you have several debts such as credit cards, there are two strategies:
- Aim to clear the card with the smallest debt first whilst still making the minimum repayments on all cards
- Aim to pay off the card with the highest interest rate first whilst still making the minimum repayments on all cards.
Secondly, you should let your credit provider know as soon earlier as possible if you are unable to make a repayment. You may be able to come to a new payment arrangement as many credit providers do cater for situations for if you can't repay due to illness, unemployment or other financial difficulties.
Thirdly, if you have contacted your credit provider but haven't been able to negotiate a new payment arrangement, there is a procedure where you can formally request your credit provider to change the terms of your loan if you are unable to repay due to illness, unemployment or other financial difficulties. Some ways it which a loan may be varied are:
- Postpone repayments with interest added to the loan
- Make interest only repayments for a period of time
- Extend the loan period where you make smaller repayment amounts, but over a longer period. In this scenario, in the long term you will pay more interest
To make an application for a hardship variation, contact your credit provider for a request for hardship variation form. Once you submit your application to the credit provider, they must reply within 21 days. If the request is denied, you will be given a reason. If you think the decision is not fair, you are able to make a complaint to an external dispute resolution scheme, to which almost all financial providers must be a member of.
Fourthly, similarly if you are having problems repaying your utility bills such as gas, electricity, water or phone bill, you should contact your provider to make an alternate payment arrangement. Most allow you to repay your bill in installments. It's important you don't use your credit card to repay your utility bills, as you are really just switching your debt over to the credit card.
Finally, if you need more information regarding your personal situation you could seek financial counseling. There are government agencies and community organizations which are there to assist you free of charge with your debt concerns.
Here are some resources:
- Find a financial counseller –
- Free hotline phone: 1800 007 007 – this free helpline operates 9:30am-4pm, Monday to Friday
Free Legal advice - Consumer credit legal services:
ACT - Consumer Law Centre of the ACT Phone: 02 6257 1788
NSW - Consumer Credit Legal Centre NSW Phone: 1800 808 488
NSW - Redfern Legal Centre Phone: 02 9698 7277
Queensland - Caxton Legal Centre Phone: 07 3214 6333
Victoria - Consumer Action Law Centre Phone: 1300 881 020 or 03 9629 6300
Western Australia - Consumer Credit Legal Service WA Phone: 08 9221 7066
Emergency Relief – for emergency help with living expenses there are charities who can assist. Salvation Army Phone: 13 72 58