Financial Hardship Assistance explained

05 Mar Financial Hardship Assistance explained

Financial Hardship Explained

Financial Hardship is the term used when people are having difficulty paying bills and debt repayments when they are due. In Australia, credit institutions must provide some means to assist debtors who declare they are in Financial Hardship and need assistance. This includes your mortgage. There are a number of different reasons that people can experience financial hardship and it is usually a short term situation created by something unexpected like unemployment, substantial medical or other bills and it can be quite stressful to try and constantly juggle repayments and make ends meet.

Most financial hardship programs will require some form of proof of hardship, and will usually conduct an individual assessment of your financial situation to ensure you meet their criteria. Once they have assessed your situation they may offer you reduced payments for a period of time, total moratorium (no payments) for a few weeks or may restructure your loan altogether. It’s important to remember that Financial Hardship is a short term solution and is usually helpful to cover you for a short period of three – sixth months only.  Creditors are looking to see when you will be again able to pay your way again under the original terms so may reject your application. Until recently, your application for Financial Hardship was not recorded on your credit file, but this changed in Australia.

Relief Programs

There are also a number of other different relief programs available, each with different eligibility. Some of these are below:

Emergency Relief – The Multicultural Services Centre provides emergency relief such as food vouchers, payments of rental arrears, outstanding utilities etc. for people in immediate need.

Hardship Utility Grant Scheme (HUGS) – This program is designed for people who are unable to pay their utilities due to financial hardship. The utility provider works with you to come up with a manageable payment arrangement to avoid disconnection.

Financial Assistance  – The Salvation Army has an emergency relief team that can support you with an immediate basic needs package. They also have financial councillors, financial coaching services and a no interest loan scheme available.

Making Ends Meet – A financial support program by Anglicare WA helps working families living in rental accommodation by providing a grant to pay bills and develop skills to manage your budget.

Hardship Variation – This is an option for those struggling to make mortgage repayments. A mortgagee can apply to their lenders for a Hardship Notice, which can make your repayments more affordable by extending the loan period, or giving you more time to sell your house.

How we can help

If you find yourself in a really serious struggle with debt collectors chasing you and it seems like you might have to go bankrupt, there are alternatives even if your situation is serious.

Talk to us at Active Debt Specialists, we are experts at implementing the Debt Agreement* repayment option, which has no interest, stops debt collectors and your repayment is only what you can afford.  It’s an Act of Bankruptcy but you can keep your home and other assets if half of your creditors accept your repayment offer, which is based on what you can afford.

Find the right solution to help solve your credit card debt issues.

Give us a call today on 1800 085 550 for a free no- obligation confidential chat.

* Debt Agreements will affect your credit rating and conditions apply. Find out first.

 

 

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