What is a Hardship Application?

What is a Hardship Application?

If a consumer contacts a credit provider and indicates they are experiencing financial hardship, the credit provider is under a legal obligation to offer assistance.

Many people experience financial difficulties at one time or another. This can be caused by a number of  events such as loss of employment, a collapse of a business or a separation or illness. The real challenge is trying to juggle bills during these times. So, what is a hardship application in relation to this?

Well, as this is a situation many people and consequently creditors face, most credit providers carry specific hardship policies.

If a consumer contacts a credit provider and indicates they are experiencing financial hardship, the credit provider is under a legal obligation to offer assistance. In fact, even if the consumer didn’t contact the credit provider during a time of financial hardship a credit provider should be alerted to the fact there is a problem due to payments being missed, or not made at the required level and take a proactive stance and contact the borrower to see what the problem is and if they are able to help.

Financial assistance when offered by a credit provider can take a number of forms including a hold on payments for a period of time, this is often known as a payment moratorium, an adjustment of the payment amount or even the cancellation of the credit contract altogether.

If a credit provider does not offer financial assistance when this is required they are potentially in breach of the law including the National Consumer Credit Protection Act and the Banking Code of Conduct. There are significant ramifications and fines should a credit provider not comply with their legal obligations under the various financial hardship provisions.

Hardship Protection

Hardship legislation is there to assist people in need of help and can prove to be a real life saver when they are experiencing difficult financial times, the current challenge however is few people know anything about this and tend to bury their heads in the sand instead of actively seeking assistance.

Professional debt mediation companies such as Just Budget Pty Ltd understand hardship legislation and are experienced in dealing with credit providers and arranging financial relief on behalf of their clients.

One very powerful aspect of financial relief is arranging a freeze in both payments and interest for a period of time, In most cases this gives a person time to gather their thoughts and workout the best course of action going forward.

We hope this helped you understand what a hardship application is. Just Budget Pty Ltd works closely with their clients and credit providers to help people to establish realistic budgets and manageable payment plans so both the credit providers and the consumer are comfortable with the arrangement and most importantly the consumer is able to service their current debts while still having enough money to pay any unexpected bills and enjoy their lives.


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