| 1. I have unexpected expenses because of bushfires and am unable to meet my financial obligations. What can I do? |
- Consumer Affairs Victoria (CAV) can provide information and advice on strategies to deal with debt, such as negotiating a payment plan with your credit provider or formally requesting a ‘hardship variation’
- CAV can also refer you to a free financial counsellor to help you deal with debt issues
- Please note that CAV does not provide advice about financial planning or long-term budgeting support.
Further Information:
- Contact CAV on 1300 55 81 81.
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| 2. What if I am behind in a loan payment because of expenses related to bushfires? |
If you fall behind in your loan repayments because of unforeseen expenses related to the bushfires, you can apply for a ‘hardship variation’ from your credit provider.
This is a formal request to your credit provider under the Consumer Credit Code (which covers most personal credit transactions) to change your credit contract to make it easier for you to repay the loan.
When negotiating a hardship variation, you can ask for:
- the term of the contract to be extended and the payments reduced, or
- payments to be postponed for a period (either with or without extending the contract term).
- A hardship variation does not include a change in the annual percentage rate or rates.
The credit provider’s decision about whether to accept the variation may be influenced by your payment history and security for the loan. For your application to be successful, you need to show you can meet your obligations to make repayments at a later date.
If the credit provider does not agree to the variation, you may be able to apply to the Victorian Civil and Administrative Tribunal (VCAT) to have your contract changed.
For a hardship variation request to be valid, it must be in writing. However, some lenders offer an automatic three-month hardship variation over the phone. Contact your lender to see if this is available.
Even if your contract is not covered by the Consumer Credit Code you should still approach your credit provider to discuss your situation and try to come to an arrangement.
The Australian Bankers’ Association has announced that its members may offer the following assistance to individuals affected by the bushfires:
- temporary suspension of home loan repayments for existing customers
- waiving fees on early withdrawal of term deposits
- waiving establishment fees for businesses with existing loans who may wish to restructure their borrowings
- providing additional loan funds where appropriate
- emergency credit limit increases on credit cards to assist with unexpected costs due to the impact of the fires.
Customers of building societies or credit unions are also eligible for assistance including emergency access to funds, replacement of cards and insurance claims.
You are strongly advised to contact your lender in the first instance.
Further Information:
- Contact CAV on 1300 55 81 81.
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| 3. My house has been destroyed in the bushfires, and I have an outstanding mortgage with a credit provider. Do I still have to pay the loan mortgage payments? |
- You are still obligated to continue repaying the housing loan, however you can apply for a hardship variation to vary the terms of the loan. See question 2 for more information
- If your home was insured, you can apply for a temporary postponement of payment until the insurance claim has been finalised
- For further information, contact Consumer Affairs Victoria on 1300 55 81 81.
Further Information:
- Contact CAV on 1300 55 81 81.
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| 4. I had items on a leasing agreement and the items have been destroyed in the bushfires. Do I have to meet the rest of the payments? |
- Under the terms of a lease agreement that includes an option to purchase, you are obligated to meet the payments. You may also be liable to replace the item destroyed
- If you miss payments, you may be charged with additional penalties. You may even be asked to pay out the entire contract immediately
- Check to see whether the item was insured, and the terms of the insurance. You can also apply for a temporary non-payment period if the lease is covered by the Consumer Credit Code. For further information see question 2
- If you have a rental arrangement, without any entitlement or obligation to purchase, the situation will depend on the terms of the rental agreement. You will still have the right to request a hardship variation.
Further Information:
- Contact CAV on 1300 55 81 81.
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| 5. My loan or lease documents have been destroyed in the bushfires. What can I do? |
- Under the Consumer Credit Code, you can request copies of documents relating to your loan or lease contracts. In most cases credit providers must provide you with copies of your contracts, as well as other information on request
- Please note that a credit provider can charge a fee for providing information and documents, provided the contract allows such a fee to be charged. However, given the circumstances, it is worth asking whether this fee can be waived
- For further information, contact Consumer Affairs Victoria on 1300 55 81 81.
Further Information:
- Contact CAV on 1300 55 81 81.
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| 6. I am behind in my repayments because of the bushfires. Can a default be listed on my credit report as a result of non-payment? |
Regardless of the reason for non-payment of a debt, a default can be listed on your credit report if all the following conditions are met:
- you were at least 60 days behind
- the lender has made a written demand for payment
- the lender notified you (at or before the time you entered into the agreement) that personal information would be given to a credit-reporting agency
- the lender warned you of its intention to list at the time it made its demand for payment
- the amount listed is limited to the amount which can be demonstrated to have been overdue for 60 days
Only a business that allows you at least 7 days to pay an account and is a member of a credit reporting agency is allowed to list a default on your credit report. In any case, the creditor has discretion to not list a default (even if they are entitled to) or to remove a default listing.
Further Information:
- Contact CAV on 1300 55 81 81.
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