Are you experiencing financial hardship due to loss of work or reduce working hours? Then this article will be the one to read.

Bank Covid-19 response

Despite being caught unaware, in terms of financial hardship assistance, most banks have handled the Covid-19 crisis well. In order to work through their case backlog some were even approving payment moratoriums, or ‘payment holidays’, automatically without their normal conditions for qualification. However, if you secure a 3-month payment holiday from several months ago, you will now find it harder to re-apply for a further payment holiday.

If you want more information on how we can reduce your debts by ½ or more within 3 weeks, then talk to us on 1300 490 030 or visit creditmediation.com.au, for more information.

Banks position post Covid-19

Now that many financial institutions have worked through their backlogs, they are paying more attention to hardship applications and who qualifies for them. If you lodge a financial hardship application to your bank, they will now require you to evidence your income & expenditure and asset & liability position. This means providing payslips, bank statements, mortgage statements and more. The bank will then closely scrutinise your case before considering the hardship application for approval.

If you are experiencing a budget problem, as opposed to a financial hardship problem, your bank will quickly pick this up and deny your request. In the eyes of the bank, a budget problem is when you have too much discretionary spending, such as excessive spending on alcohol, holidays, entertainment etc.

Are you in genuine financial hardship?

If so, the bank will probably approve your request, but what happens if they reject your application? It’s important to note, the credit codes governing the banks do not force them to approve hardship applications. However, you do have a right to lodge an internal dispute with your bank to appeal their decision. If you are unhappy with this outcome, no problem, you can lodge a formal complaint to the Australian Financial Complaints Authority and they will look at your case.

Debt Settlement

Virtually all unsecured debts, and some secured debts, are eligible for debt settlement through Credit Mediation Service. Debt settlement allows your business to settle its debts for half the amount you owe in less time than with a consolidation loan typically, in as little as 3 weeks in some cases. If you are struggling with your loan repayments, it might be a good idea to contact us and check if you qualify for a partial debt waiver with your banks. Debt settlement will not impact your credit report, nor should you pay any upfront cost, talk to us on 1300 490 030 or reach out at [email protected]

About the author

Laurence Hugo is the director of Credit Mediation Service P/L, he is a highly experienced negotiator with three decades of banking, debt management and marketing experience.

This article should not be considered legal or financial 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.