If you are having difficulty in meeting your financial obligations due to low income, unemployment, ill health, relationship breakdown, addiction or no particular reason, then you are not alone. Thousands of Australians get into financial trouble every year and the number is increasing. The first thing to do is contact creditors, explain your circumstances and see if they will agree to change your obligations to something you can afford. If consumer credit contracts are changed by agreement the creditors should confirm this in writing. The Consumer Credit Code provides a formal procedure for varying loans in cases of hardship. Sections 66-68 provide that a consumer may apply to the creditor to vary a contract of up to $125,000 by either:

• Reducing the amount of payments; or
  
• Postponing payments for a time; or
  
• Both.

However, the money will still need to be repaid, so the length of the contract will be extended. If the creditor does not agree to a variation in NSW, you can ask the Fair Trading Tribunal to order the creditor to do so. Apply as soon as possible as a time limit applies. Forms and information are available through the NSW Dept. of Fair Trading (www.fairtrading.nsw.gov.au).

DISCLAIMER The information provided in this information sheet is of a general nature only, and is not intended to be legal advice. There may be errors or inaccuracies or the information may not be completely up-to-date. Always check the information provided before relying on it. The information relates to consumer law in New South Wales, Australia