DON’T PANIC!

It may not be as bad as it seems, but even if it is you may have a number of alternatives if you proceed systematically.

• Work out a Money Plan related to your pay period. If your joint income is received at different periods relate it to your food shopping cycle. BE HONEST — write down what you (and your partner) are actually spending NOW.
  
  
• Decide (jointly, if relevant):
  • Can basic living costs be decreased? How?
  • Priorities — need versus wants
  • Can you increase your income?
• Meanwhile if you have regular debt repayments you cannot meet in full or at all, contact the Credit Provider immediately and explain your situation and negotiate an agreement. If you neglect to do this, the credit provider may commence legal action.
  
  
• If all efforts with the Money Plan leave outgoings exceeding income contact the Credit and Debt Helpline on 1800 808 488. Make an appointment to get independent advice regarding your options, which could be:
  • Additional ways to economise on your budget
  • Offers of reduced payments to creditors — perhaps freezing of interest in case of hardship.
  • Disposing of some assets.

NOTE: Two options that should only be considered after seeking advice are:

• Consolidating your loans, because this may add to your problem in the long-term rather than solve it if you enter into it without considering such things as additional/higher interest, loan establishment fees, security required by creditor, length of loan etc.
  
  
• Bankruptcy — a last resort. The financial counsellor will explain the conditions and how it will affect you in the future.

REMEMBER: It is never too late to seek advice.

For more helpful information, please see our other Fact Sheets.

DISCLAIMER: The information provided in this fact 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.