For whatever reason you may have found yourself in a situation where you cannot pay your bills or make your repayments on your loans. This can be an extremely stressful situation and you may not know how to get help, especially if you have never experienced it before.
Act fast if you can’t pay your mortgage
There are people you can turn to, but you must do this fast. Do not stick your head in the sand and deny that it is occurring-that will only ensure that your problem spirals more and more out of control. The sooner you find help, the sooner you can resolve your situation.
Talk to your credit provider
If you cannot keep up with your repayments on your loans or the bills on your credit card contact your credit provider. You need to tell them you are experiencing financial hardship and they might be able to work something out with you.
All banks and credit institutions will have procedures to help customers experiencing financial hardship. If you are unhappy with their decision you can complain to one of the independent financial ombudsmans.
Hardship variations – change your loan to help you
Once you have tried to negotiate a deal with your credit provider and had no luck, you have a legal right to seek hardship variation. This is where you can get the terms of your loan altered such as extending the period of your loan or postponing repayments for a period of time.
Once you apply you must receive written response within 21 days from the credit provider. If for some reason it is rejected you can again complain to one of the independent financial ombudsman. You can find examples of hardship variation letters at www.moneysmart.gov.au.
Tips to help you out in times of not being able to pay mortgage
If you are in a situation where you are struggling to pay bills try not to borrow money. This will only escalate your problem and spiral you into more debt. Most of the gas, electricity and water companies also have systems in place to help customers in financial hardship.
In terms of credit cards make sure you pay all the minimum repayments on each card. It may help you to tackle the lowest debt first which will keep you motivated as you get rid of them.
If you are looking at refinancing your loan be wary about extra fees and charged involved. Also make sure you will be able to afford the repayments on the new loan. Be extra careful about brokers who maybe promising you the moon without showing you all the details.
If all else fails
If all else fails you may need to think about selling your property to find a cheaper option. It is better if you do this rather than a bank foreclosure as they are likely to go for a quick sale to regain their monies, thus you may lose a considerable amount.
There is also free financial counselling and legal advice offered by some government agencies and community organisations. You can visit www.financialcounsellingaustralia.org or www.nla.aust.net.au for your state’s legal aid office.