IF YOU ARE HERE READING THIS YOU ARE PROBABLY DESPERATELY LOOKING FOR SOME GUIDANCE. YOU HAVE PROBABLY BEEN SHOCKED AT THE FACT THAT PEOPLE CHARGE MONEY TO HELP YOU BECAUSE YOU HAVE NO MONEY!!!! WHAT THE....
I will tell you about my husband and my situation and that by looking into real solutions and quickly we managed to save our car, some money, been taken to court or loosing any of our possessions.
We were both made redundant in that terrible period of economic meltdown in Australia a couple of years ago, we were both working full time and just managing to pay the bills with the wages I was on. Suddenly we were faced with no income and a house to pay rent on, a leased car, about 6 Credit Cards and a personal loan amongst other smaller but well overdue debts. Eventually the power company starting sending threats of turning off the electricity, the phones were getting turned off one by one, the home phone, the mobiles....everything was falling to pieces. We needed a very very quick solution and finding work wasn't working.
I started to read up on how to deal with debts and debt collectors that constantly call, 10 times a day, putting the fear of god into you because they have the power to belittle and make you feel bad for not having any money. Well they can't do that, it's illegal. YOU HAVE RIGHTS and you can get the callers off your back almost instantly. You can also appeal to your creditors to give you some options regarding your inability to pay. Some things I learn't pretty quickly was that Debt collectors should not intimidate and scare you. You have rights.
Debt collectors should not:
Act in a way that is misleading or deceptive
Harass or force you into paying
Go to your workplace unless you ask them
Reveal information about your financial situation to others
Contact you by email, phone or letter more than three times a week
Contact you on national public holidays
If you believe you are being unnecessarily harassed by a debt collector, complain or write to your lender.
Even though you will cringe when I say this, answer the phone! They can not kill you over the phone and they cannot do anything at all in fact! You need to tell them that you are currently looking into Debt Consolidation and want to appeal for a hardship variation under section 72 of the consumer credit code. They will sort something out either over the phone or I recommend that you put everything you are appealing for in WRITING because it gives you some form of proof that you are trying to do something about your debts. The most important thing to Creditors is communication, the reason they always call is because if you don't answer the phone they put you into a 'triying to do a runner' pile and then you are harrassed more. If they have up to date details on you and frequent communication they relent. It's true, I did it. I was not answering the phone, ever, I started to not leave the house and I became very depressed. The moment I realised I needed to speak to them so they know I want to pay the bill they changed, everything changed. If you are willing to pay, they will be willing to come to an arrangement.
HAS YOUR PHONE BEEN CUT OFF?
All Australians have the right to have reasonable access to a standard home telephone service. (Note there is no right to access a mobile phone service under this requirement).
In meeting this responsibility, phone and internet service providers operate hardship programs to assist people experiencing financial hardship due to reduced income manage their debts.
If you have insufficient money to pay your bill because of financial hardship, your home phone service provider can only disconnect your service after they have done all of the following:
1 Advised you that they may disconnect your service if you don’t pay; and
2 Discussed your repayment options, not just cut you off, discuss your options and the services of financial counsellors and consumer advocates for managing debt; and
3 given you at least seven days notice of their intention to disconnect your service; and
4 advised you in writing that they plan to disconnect your service; and.
5 informed you of the earliest date upon which disconnection will occur.
If any of these requirements have not been satisfied and you are disconnected for not paying a phone or internet debt you can lodge a complaint with your service provider and the Telecommunications Industry Ombudsman (TIO)
If you are receiving Centrelink benefits, you can ask for the reconnection fee to be waived.
This is an online complaint form if the company hasn't followed protocol - http://www.tio.com.au/ComplaintForm/ComplaintFormS1.asp
CAN'T PAY YOUR WATER, ELECTRICITY OR GAS BILLS?
Apply for deferred payment
You may be able to negotiate with your council to defer your rate payments for a specified period if you can demonstrate the payment will cause you severe financial difficulty. This option may be suitable if you expect your change of circumstances to be short-term.
Work out your income and expenses and obtain help to ascertain when you will be in a position to pay. Then contact the council by phone or visit the council offices to request a deferral of your rates for the period it will take to get your finances into a better position.
Remember that you will have to pay the deferred rates and should do so as soon as you can because high interest charges may apply to your arrears.
Your council will require you to pay rates they have deferred if:
they believe your circumstances have changed, so payment will no longer cause you hardship; or
you sell or are no longer living in the property.
CREDIT HARDSHIP HOME, CAR AND MAJOR LOAN VARIATIONS
Credit hardship variations
Most providers of finance for personal and household purposes (including mortgages, car loans, personal loans and credit cards) are required under the consumer credit law to consider variations (flexible payment arrangements) if you are experiencing financial hardship. This requirement applies to lenders and debt collectors attempting to recover the debt.
If your circumstances have changed but you think you could manage your loan if the monthly payments were reduced, or otherwise changed, you can request a credit hardship variation.
What credit hardship payment plans can you ask for?
You can contact your lender or debt collector by phone or letter and request the following types of loan variations:
1 a reduction of your regular payments to a more affordable level and a consequent extension to the term of your loan; or
2 a short-term stop on payments, and a consequent extension to the term of your loan; or
3 a short-term stop on payments, after which you will catch up the missed payments.
The particular variation you ask for will depend on which is the most affordable to you, taking into account that any extension to the term of the loan will mean higher interest costs for the overall loan.
You can ask for a stop on interest charges, but your creditor is not obliged to agree to comply with your request.
How to ask for a credit hardship variation
If you wish to ask for hardship consideration, it is always better to put your request in writing as this means you can keep a copy of the request as a record. It is more difficult to prove the details of a request made by phone.
An example letter for applying for Hardship with your lender:
[Date]
[Your street]
[Your suburb and postcode]
[Your phone number]
Hardship Manager
[Name of lender/creditor/debt collector]
[Street number and name]
[Suburb and postcode]
Dear Hardship Manager,
Subject: Request for hardship variation: Name: [Your Name] Account No. [your number]
I wish to apply for a variation to the above loan contract under Section 72 of Schedule 1 of the National Consumer Credit Protection Act 2009, as my circumstances have recently changed causing me financial hardship [give details].
[Choose option A, B or C from the following]
A I request a reduction of the amount of repayments to $[xx] per [fortnight/month] for all payments due from [first date]
B I request a postponement for the repayment due on [date] so that it is now due on [date].
C I request a postponement of the repayments due between [first date] and [final date] with no extension to the loan term and payments to be caught up.
I request that where I have asked for a variation of payment arrangements I will not incur any late fees or other additional charges or interest. I understand, however, that the term of my loan may be longer due to the variation.
I provide the following details about my income and expenses in support of my application:
Details of my income and expenses:
Current income
$[xxx] per week / fortnight / month
Current expenses
Rent / mortgage
$[xxx] per week / fortnight / month
Other loan repayments
$[xxx] per week / fortnight / month
Other major expenses
$[xxx] per week / fortnight / month
As the above information demonstrates, I will be able to continue paying my repayments at the adjusted rate if you agree to the proposed change. I ask that you consider my application as a matter of urgency, and that you do not commence any legal action in relation to this matter until you have done so.
Please advise me in writing of your decision regarding my request. If I have not had a response from you in twenty one days[or state a shorter period of time if your situation is urgent], I intend to take my request for hardship variation to the approved external dispute service without further notice.
Yours faithfully,
[your name and signature]
SO, the first thing to do is to get all of your bills and write a letter for each and every one. That will give you at least a couple of weeks to stave off the hungry wolf at the door. If you need money even more desperately because your house is at risk then look at my next blog on superannuation early release. Hope this helped in some way.
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