Financial Hardship Assistance for people in debt

25th January, 2016No Comments

Are you looking for financial hardship assistance? Are you struggling with debt and can’t pay your bills? You’ve come to the right place. Thousands of Australian’s struggle with debt and there are a number of services and solutions in place to offer people in debt financial hardship assistance. Read on to find out if you are in financial hardship and learn about a number of solutions to your money problems.

Are you in Financial Hardship?

Before you can ask for assistance, you first need to determine if you are in financial hardship. You are in financial hardship if you are willing but unable to pay your debts when they are due. People can fall into financial hardship through a number of circumstances including:

  • Loss of employment
  • Reduction in income
  • Relationship breakdown
  • Illness/Injury

There are other circumstance which may leave you struggling financially. However, some creditors may not accept your financial hardship if you are experiencing financial difficulties through your own actions. These situations include:

  • Gambling
  • Excessive discretionary spending
  • Over-committing through loans and credit

If you are struggling to pay your debts on time, there are a number of things you can do. Here are some examples of Financial Hardship Assistance for people in Debt.

Ask your creditors for help

90% of people in financial hardship ignore their creditors until they are able to pay their bills again. This is a mistake! Your creditors should be your first port of call when you receive a bill you can’t pay. Generally, there is a phone number to call if you are facing financial hardship displayed on your bill. Depending on the company or organisation, you may be able to extend the due date or even organize an affordable repayment arrangement. But to do so, you need to talk to your creditors. We have put together a step by step guide on how to do that in our blog.

By simply ignoring the bill, you could incur hefty late and administrative fees and receive marks and defaults on your credit file. Creditors are generally very understanding and are happy to offer Financial Hardship Assistance to people in debt.

Speak to a Free Financial Counsellor

If after a few months you are still struggling to manage your finances you may need some professional advice. There is a free financial counselling service available in Australia. You can call the hotline – 1800 007 007 from 9am to 4:30pm and you will be put in touch with a financial counsellor in your area.

They will offer you sound, balanced and professional advice on how you can better manage your money, pay your bills and get out of debt.

Apply for a No-Interest Loan

Applying for another loan when you are in financial hardship is generally a terrible idea. You are paying off your debt by getting into more debt. But Good Shepherd Microfinance offers No Interest Loans for people needing Financial Hardship Assistance. The loans don’t accrue interest so you are given a little breathing room to get your finances on track.

You can’t use these loans to repay your debt, but can be used for essential household items, such as fridges and washing machines. You can also use them to pay for medical procedures. It is handy to know you have access to safe, fair and affordable credit in theses circumstances. The NILS is certainly a better alternative to using your credit card in an emergency.

Loans are only available to individuals and families on low income who fit the criteria. You can borrow between $300 – $1,200 and the repayments are set up at an affordable amount over 12 – 18 months.

Find a Debt Relief Solution

If you owe more than $10,000 of unsecured debt, such as utility bills, personal loans and store credit, you may need to get serious about your situation. There are a number of debt relief solutions available for people seeking financial hardship assistance. One of the more popular debt relief solutions is a Part 9 Debt Agreement. A Part 9 Debt Agreement is a government regulated agreement between you and your creditors. It is a legally binding agreement allowing you to repay an affordable fraction of your debts to your creditors. You creditors must agree to your Debt Agreement and will often accept a small percentage of your original debt amount to satisfy your obligations.

A Part 9 Debt Agreement is part of the Bankruptcy Act, but is a softer approach to repaying your debts than declaring bankruptcy. There are no restrictions on your assets or wealth in the term of your Debt Agreement and your credit file is quick to recover once the agreement has ended.

Other possible solutions include consolidating your debt by refinancing your mortgage, informal debt agreements and even bankruptcy. To speak to an expert about your money troubles and for financial hardship assistance, call us on 1800 00 3328. Our experienced Case Managers will go through your situation and advise you of your options.