Financial hardship support can begin with the creditor
An Australian borrower who cannot maintain payments can ask the creditor’s hardship team to consider the situation. Prepare a budget showing what can be paid and explain whether the difficulty is temporary or continuing. The National Debt Helpline provides guidance on negotiating terms and access to financial counselling. A conversation about hardship is different from signing a formal debt agreement with fees and statutory consequences.
Compare the formal options with independent assistance
AFSA administers Australian personal insolvency arrangements and explains the differences between debt agreements, personal insolvency agreements and bankruptcy. Their effects on assets, credit information and secured creditors require careful examination. Moneysmart recommends exploring alternatives and obtaining free counselling before selecting a formal route. A provider’s promise of a smaller instalment should be tested against the entire arrangement, including administration costs and what happens if it cannot be completed.
