Understanding your options when you can’t pay
So, you’re short on cash and stuck in a tough spot.
Perhaps you’ve suddenly become unemployed, fallen sick, or have been hit with some unexpected urgent expenses.
Whatever the reason for your financial stress, you’re unable to make your debt repayments and not sure what to do.
Dealing with debt
Being unable to make your repayments can be stressful. You start worrying about how you’re going to make ends meet, and whether a big black mark is going to appear on your credit report and haunt you forever.
- The first thing to do when you can’t make your repayments is to talk to your credit provider and try to reach a revised repayment agreement with them.
- You may also qualify for a hardship variation, which will give you longer to repay your debt, in smaller repayments.
When you need help
Sometimes, revising your repayments just isn’t enough. You simply might not have the cash to make reduced repayments, or any at all.
Be careful who you go to
- The good news is, there are a number of places where you can seek help when you’re experiencing financial stress.
- The bad news is, not all of them have your best interests at heart. It’s important to know the difference when dealing with debt.
Don’t pay more cash to get out of debt
- Some companies offer to help people who are struggling with debt. Beware, as many charge fees and are really debt consolidation companies.
- They make money out of you, either in upfront fees, or in commission fees on a new loan they offer you.
- Proceed with caution and know how much their services are going to cost you.
- This handy AFSA video on Untrustworthy Advisors has some great information on what to watch out for.
Free financial counselling
- There are a number of financial counselling services that you may be able to access for free. They can often provide the same services as a credit repair company, without costing you cash.
- This Moneysmart video explains what a financial counsellor does, and how they can help you when dealing with debt.
- Some organisations who can provide you with free financial help are:
- The National Debt Hotline has professional financial counsellors and offer a free, independent and confidential service to help you get back on track.
- You can also use the Moneysmart financial counsellor online search to find someone nearby who can help you.
Want more info on your options?
This ‘Can’t pay your debts?’ factsheet from Moneysmart has some great info on the various options available to, and what your rights are.
We know it’s tough out there
At City Finance, we’re different to other lenders – we understand how tough it can be to make ends meet and are here to help. We take the time to get to know you, and focus on your unique situation to tailor a loan and repayments around you and your needs.
Whether you need new finance or want to discuss making changes to your existing arrangements, call us on 1300 34 62 62 or pop into your local branch today for a chat with our friendly staff, and together we’ll work on a solution to see you through.
This article is provided as a guide only and does not constitute financial advice. We encourage you to do your own research through the Australian Financial Security Authority and Moneysmart to reach a debt management solution that is appropriate for you.”