Always talk to your creditors. They can help you make a repayment plan that both parties are happy with.

If you are negotiating a new repayment amount, offer what you can reasonably afford to pay.

If you are experiencing "hardship" during the term of your loan due to illness, unemployment or other reasonable cause, and are finding it hard to make the payments, you can ask your creditors for a 'hardship variation".

This is a temporary arrangement only, intended to help you through the hard times, until you can get back on your feet with your regular loan repayments.

Getting Help with Debt

If you feel that you are in over your head with debt, there are people who can help. Stay calm and work out what you can reasonably pay each person to whom you owe money (your creditors), considering both your living costs, rent or mortgage, and all your debts. The ICAN Office can help you with your budget plan.

Talk to your Creditors
First, talk to your creditors and tell them you want to sort things out - you will probably find them helpful provided you have a reasonable proposal about how to manage the problem. After all, they want their money and it is in their interests to help you to pay, however long it takes. The earlier you let them know there is a problem, the easier it may be to arrange a solution.

Offer only what you can reasonably afford to pay, and offer something to each creditor. Try to cover interest or charges applying to the debt. Ask if the creditor will agree to reduce the interest on the debt until you can get back on your feet. Confirm any agreement in writing.

They can also help you to decide which are your most serious debts. Contact the ICAN Office or one of the organisations in the Useful Contacts section.

What is a "Hardship Variation" to loan repayments?

If you are unable to make your loan repayments due to illness, unemployment or any other reasonable cause, you may apply to your lender or creditor for a variation to your loan agreement. However, to make this application you need to be suffering only a temporary inability and be able to prove that you will ultimately be able to pay the entire loan.

A hardship variation can only alter the loan agreement in the following ways:

1. Be very careful of being offered a solution where you only have to make one payment per fortnight or month to a third party who will then pay your creditors for you. It may be a Debt Agreement that will affect your credit rating for 7 years and be on the bankruptcy records for life. If you cannot pay as you said you would, you cannot terminate the agreement without your creditors' approval.
2. Get independent advice. Some loan companies offer advice but may charge you for it and it might be an offer of another expensive loan.
3. If you put property up as security for a loan, you risk losing it if you cannot keep up the repayments.

 
 
Suite 6, 7 Anderson Street Manunda Cairns QLD 4870 :: P.O. Box 994N North Cairns QLD 4870
Phone: 1300 369 878 (local call cost anywhere in Australia)  Fax :: 07 4040 4556 :: Email:: info@ican.org.au :: Disclaimer