How to Seek Hardship Assistance With Your Bank
Help with debt repayments and debt relief can be an infuriating experience for people. There are a host of debt solutions in Australia from the Banking Financial Hardship teams to professional Debt Solution companies. Yet sometimes there is that feeling you are not getting the best debt assistance due to conflicting motives.
In terms of debt solutions, this article will show you how to get help with debt directly from the bank. This does not mean the Debt Mediation Industry should be avoided, contrary to this; a good credit card debt negotiator is worth their weight in gold, however, if you want to do it yourself and prefer to deal directly with the bank then read on.
There are four reasons why your bank could reject your application for help with debt balance:
- They’re looking for a reason to say no
- Their overwhelmed with hardship applications and may miss some important points
- Some are undertrained and overseas
- Incomplete information on your hardship application
For these reasons, your debt rescue plan may fall apart. The banking industry has seen some very poor examples of lack of compliance with the NCCP Hardship laws, yet some banks perform really well in this space, Westpac and CBA are a standout from our perspective.
How to approach your bank for financial hardship
Debt negotiation is best left with the experts like financial counsellors or specialised debt negotiators. However, if you approach the bank yourself for debt assistance its best to keep the following factors in mind:
- Budget first
- Time your hardship application
- Be honest
- Include all legitimate expenses
Step 1 Budget first. Debt relief solutions are not the immediate responsibility of your bank, if you write and maintain a budget you might find you have solved your own problem. Common reasons for rejection of debt assistance are due to evidence of excessive spending patterns on non-essential pursuits and items.
Step 2 Time your hardship application appropriately. Technically you are only allowed one successful hardship application with your bank. If you know you’ll be out of work in a month from now it’s best to wait until your unemployed and on Centrelink before applying for hardship -you want to maximise your ‘payment holiday’ period as long as you can.
Step 3 Contact the Hardship Department of your respective financial institution by phone or email. They will email or mail you hardship application documents for you to complete and return. Follow their guide on what to supply in terms of payslips and evidence of other debts you may have. If you’re looking for a business specialising in business debt mediation then its best to contact someone who specialises in Debt Negotiations as your business debt is not covered under the Hardship laws.
Step 4 Complete the financial statements honestly and include all expenses. The banks will allow some modest discretionary expenses like alcohol, cigarettes church donations. Yet it is essential you include ALL expenses including the unexpected, like dentist bills, new tires for the car and so on.
If your application is successful it will not mean a debt reduction, rather a three-month payment holiday as a debt relief solution for you. If it is not successful you may contact your bank to seek clarification on the reasons for their rejection, if you are not successful at this point you may follow the banks External Dispute Resolution process with AFCA.
There are plenty of opportunities for debt help in Australia, you can seek professional help or approach the banks yourself -the credit laws are geared to help you with credit card debt.
This article should not be considered legal advice, but as a general guide only. If you are facing legal recovery action, please consult a legal attorney to assist you. For further information on how to have your debts cut by half or more through a specialist negotiator, reach out to us on [email protected], or contact us on 1300 490 030.