Owing money or falling behind on debts can be stressful, but there are ways you can make things easier.
If you are unexpectedly in a position where you are unable to meet your credit repayments you should contact the credit provider to discuss a hardship arrangement.
Options might include;
- Having a break from payments
- Making reduced payments
- Renegotiating the term of the loan
Most organisations will work with you to resolve the matter as long as your offer is reasonable and you keep to the agreed payments and update them if your situation changes.
Always remember if you are in difficulty, make a list of what you owe so you have a clear idea of your debts and then create a budget so you can work out how much you can afford to pay towards the debt.
If you are unable to reach a suitable arrangement with your creditor, you may consider making a complaint.
The Australian Financial Complaints Authority (AFCA) is a fair, free and independent dispute resolution for financial complaints about issues such as credit, finance, loans, insurance, banking deposits and payments, investment and financial advice and superannuation.
You can visit their website here: https://www.afca.org.au/
Tips for banking
- Shop around for bank accounts with the lowest fees and charges (some banks have low fee accounts for full time students)
- Put your savings in a high interest bearing account – often online accounts have no fees or charges and pay good interest
- Consider ways to minimise transaction fees – withdrawing when paying for goods with EFTPOS may save ATM fees. Keep track of numbers of withdrawals
- Beware of direct debits – if you have insufficient funds in your account you can incur hefty charges • Beware withdrawing funds from an ATM that is not affiliated with your bank – there may be a withdrawal charge
- Don’t ignore the situation – you are better off contacting the creditor and seeking assistance
- Don’t be tempted to go to a payday (short term loan) lender. You could end up further in debt and in even more financial difficulty. Instead speak to your creditor to ask for hardship, or speak to a Financial Counsellor
How can a financial counsellor help?
Financial Counsellors help people who are experiencing financial difficulty. They are skilled professionals who will guide you through your options and help you plan your way out of debt.
They may be able to assist you by:
- Doing a full assessment of your financial situation, including regular income and expenditure, assets and liabilities, to help you fully understand your position, create a budget and put a plan into place
- Providing advice on how to negotiate with your creditors, government agencies or other providers
- Negotiating directly with your creditors in certain circumstances
- Providing advice about what options, rights and responsibilities you may have
- Referring you to other services you may need, such as legal services, crisis food and accommodation services, and health services
What can a financial counsellor provide information about?
They can provide information and advice about:
- Credit and debt-related matters
- The rights of debtors
- How to lodge complaints with various ombudsman schemes if you feel you are not being treated fairly and whether you should have been given a loan in the first place
- Working out a realistic payment plan for debts
- How to access other specialist support services, including gambling, family support, personal counselling, legal aid and emergency relief
It’s then up to you to make the decisions about how to manage your situation with the advice you’ve been given.