Worked Examples and Checklists
Financial hardship requests across all your debts: home loan, car loan, cards, energy and tax
How to ask several creditors for financial hardship help at once in Australia, the National Credit Code s 72 timeframes, worked numbers for a household, and non-credit hardship programs.
When several debts are under pressure at once, you can ask every regulated lender for a hardship variation under section 72 of the National Credit Code — home loan, car loan, credit cards, personal loans and buy now pay later — and ask energy, water, phone and tax creditors for help under their own hardship programs. A credit provider must respond in writing, generally within 21 days of your notice (or of receiving information it asked for, or 28 days if you do not provide it), and if it refuses it must give reasons and tell you about AFCA. Ask early, before defaults, and prioritise the debts that protect your home and essential services. The illustrative household below shows how a coordinated set of requests can free up enough money to avoid a formal insolvency option.
This guide is part of the debt option decision checklist. It looks at the whole household rather than a single loan.
The s 72 timeframes in brief
| Step | Timeframe |
|---|---|
| Lender may ask for information it reasonably needs | Within 21 days of your hardship notice |
| Lender responds if it did not ask for information | Within 21 days of your notice |
| Lender responds after you provide information | Within 21 days of receiving it |
| Lender responds if you do not provide the information | Within 28 days of its request |
If the lender refuses, it must tell you why and that you can complain to the Australian Financial Complaints Authority (AFCA). Lenders' internal complaint processes must deal with complaints about hardship, default notices and postponement of enforcement within 21 calendar days under ASIC's RG 271, shorter than the usual 30 days. See AFCA complaints about hardship and debt.
Priority order for a household
- Home: mortgage or rent arrears, because losing housing costs the most.
- Essential services: energy, water and phone; retailers have hardship policies and disconnection protections that vary by state.
- Secured car loan if you need the car for work.
- Tax and government debts: the ATO and Services Australia offer payment plans.
- Unsecured debts: credit cards, personal loans and buy now pay later.
Worked household (illustrative)
The Nguyen family in Logan, Queensland. One partner's hours were cut for an expected 6 months, reducing take-home pay by $1,600 a month.
| Debt | Balance | Normal monthly payment | Request |
|---|---|---|---|
| Home loan, 6.2% | $420,000, 25 years left | about $2,758 | Interest-only for 6 months |
| Car loan, 9% | $18,000, 3 years left | about $572 | Extend term to 5 years |
| Credit card, 20.99% | $7,500 | minimum about $225 | Reduced payment and interest freeze for 6 months |
| Electricity | $900 overdue | n/a | Retailer payment plan of $90 a month |
What each change does:
- Home loan: interest-only on $420,000 at 6.2% is about $2,170 a month, saving about $588 a month. The balance does not fall during the 6 months, and later repayments rise slightly because the remaining term is shorter.
- Car loan: extending $18,000 at 9% to 5 years cuts the payment to about $374, saving about $198 a month, but total interest rises from about $2,610 to about $4,420.
- Credit card: a 6-month payment of $100 with interest frozen saves about $125 a month and stops the balance growing.
- Electricity: a $90 plan clears the arrears in 10 months without disconnection.
| Monthly saving | |
|---|---|
| Home loan | about $588 |
| Car loan | about $198 |
| Credit card | about $125 |
| Total | about $911 |
That covers more than half the $1,600 income drop. The family reduces discretionary spending to cover the rest and plans to return to normal repayments when hours recover. No insolvency option is needed. Check your own figures in the repayment plan calculator.
How to make the requests
- Write one short budget showing income, essentials and what you can pay each creditor.
- Contact each lender's hardship team, by phone or online form, and say you are giving a hardship notice under section 72 of the National Credit Code.
- Say what happened, how long you expect it to last and what you propose.
- Send the information the lender asks for by the deadline.
- Keep a log: date, person, reference number and what was agreed.
- Ask for the agreed arrangement in writing.
A financial counsellor (National Debt Helpline, 1800 007 007) can make the requests for you, which many people find easier.
Hardship outside the National Credit Code
| Creditor | Where hardship rules come from | What to ask for |
|---|---|---|
| Energy retailer | State and national energy rules, retailer hardship policy | Payment plan, hardship program, concessions |
| Water | State water business hardship policy | Payment plan, concessions |
| Telco | Telecommunications consumer protections and the telco's financial hardship policy | Payment arrangement, plan change |
| ATO | ATO payment plan options | Payment plan; ask about interest and release in serious hardship |
| Centrelink debt | Services Australia | Lower repayment rate, pause or waiver in limited cases |
| Business credit | Not covered by s 72 if the credit is predominantly for business | Ask anyway; banks have codes of practice |
What hardship does to your credit report
When a lender agrees a hardship arrangement on consumer credit, it can report financial hardship information for that month instead of a missed payment. According to the OAIC, financial hardship information is kept for 1 year, and lenders cannot treat it the same way as a default. A default (overdue at least 60 days and $150 or more, after written notice) stays for 5 years. See credit reports after a debt agreement or bankruptcy.
Frequently asked questions
Can a lender refuse a hardship request?
Yes, but it must give reasons in writing and tell you about AFCA. A lender may refuse if it believes you could never repay; then a counsellor can help you look at other options.
Will interest stop during a hardship arrangement?
Not automatically. Some arrangements freeze or reduce interest; many do not. Ask, and check the written terms.
My debt has already defaulted. Can I still ask?
Yes. Hardship rights continue until the contract ends, and creditors and collectors can still agree a payment plan. Once a lender has started court action, get legal advice quickly.
Sources
- Moneysmart — financial hardship and payment arrangements
- National Debt Helpline — free counsellors, 1800 007 007
- Australian Financial Complaints Authority — hardship complaints
- Office of the Australian Information Commissioner — hardship information on credit reports
- Australian Taxation Office — payment plans for tax debts
