Borrowing money is easy. It’s making the repayments that can sometimes be difficult. You might find that you have overcommitted yourself or that your circumstances have changed and you can no longer afford these repayments. If this happens, it’s important that you don’t ignore the problem and hope that it goes away because it won’t.

Debt problems don’t strike without warning. You usually receive some very clear early signals, for example:

• you keep receiving late payment or reminder notices
• you don’t want to check the mail box for fear of finding another bill
• you are still paying off your credit card spending from last Christmas
• worse, you are still paying off the holiday you had two years ago
• you are now on your second mobile phone provider
• you have three credit cards and have just applied for a fourth
• none of your family or friends will lend you any more money
• a sheriff came to the door and served you with some sort of legal document
• your pay is allocated to debt repayments and there’s nothing left for food
• you’ve started catching the bus because you can’t afford petrol for the car.

What you can do

If you’re having trouble meeting your loan repayments you should do everything you can to prevent your car, home or anything else from being repossessed. This means contacting the lender to try to come to some sort of arrangement to repay the loan. Sometimes the lender will agree to change your repayment plan to make it easier for you to pay the loan. For example, the lender may agree to reduce your repayments and extend the term of the loan or postpone repayments for a certain period of

time. Sometimes the lender will agree to a combination of both. 

Once you come to an agreement, it’s essential you get it in writing and file it away. If you feel that you still won’t be able to repay the loan after the lender has agreed to an easier repayment plan, it might be time to get advice from a financial counsellor.

IMPORTANT – To find the location of your nearest local financial counselling service, call the Credit and Debt Hotline on 1800 808 488.

What if the lender won’t budge?

If the lender is not willing to change your repayment plan, you can contact us and we might be able to help you. Under the Consumer Credit Code you may be able to have a Court order a relief plan on the basis of hardship if you can show that:

• you have tried to come to an arrangement with the lender
• the hardship has been caused by unemployment, sickness or some other reasonable cause
• your situation should improve.

Contact your nearest Fair Trading Centre on 13 32 20 to find out if you are eligible for this kind of help.

Where to get help with credit problems

Financial counsellors

Over-reliance on credit can cause serious hardship. It creates financial and emotional turmoil for consumers. However, there are organisations that people can turn to for guidance and advice when they find themselves in over their heads with debt.

Community financial counselling services provide help for people experiencing problems with debt.

These provide free, confidential advice on financial matters and operate throughout New South Wales.

Financial counselling groups provide a service to people from all walks of life who find themselves in serious financial difficulties.

After assessing their client’s financial situation, trained counsellors:

• prepare a full financial assessment and provide options for change and improvement
• detail the availability of any government assistance
• negotiate, advocate and mediate with credit providers and government agencies
• assist with information on debt recovery, bankruptcy and other paralegal matters
• ensure appropriate referrals to other sources of assistance, for example, legal aid, personal counselling and government services.

Financial counselling is a valuable community service that helps people regain control of their financial affairs.

IMPORTANT – Under the Consumer Credit Code you may be able to have a Court order a relief plan on the basis of hardship. Contact your nearest Fair Trading Centre to find out if you are eligible.

Where to get more information

Office of Fair Trading Specialist Support Unit
Tel: 9895 0297
Provides information and assistance on consumer credit laws.

Other sources of assistance

Financial counselling services provide free advice on financial matters for people experiencing problems with debt.

Credit and Debt Hotline
Tel: 1800 808 488
Financial counselling information, advice and referral.

Financial Counsellor’s Association of NSW Inc
Website: www.financialcounsellors.asn.au
For a full list of free financial counselling services in NSW.

Insolvency and Trustee Service Australia (ITSA)
Tel: 1300 364 785
Provides information on bankruptcy and its alternatives.