It was topical a few months ago that borrowers in financial hardship could ask for assistance from their home lender. A lot was in the papers but there was no substance how or what specific assistance was available.

Financial problems are said to be the number one cause of divorce, a major reason for suicide and one of the highest stresses that people face.

The first instinct of borrowers when they get into financial trouble is to hide, not opening mail or answering telephone calls from “private callers”. This is the last thing they should do. It is crucial that the lender is contacted and some sort of negotiation started as soon as possible. This is where a good real estate agent or mortgage broker should get involved.

We have also all seen where mortgagee sales result in much lower sale price than might have been achieved though a normal marketing campaign, leaving families owing more than the sale price. Letting the bank sell the property should be the last option after all other avenues have been tried.

Over the years I have seen and heard of amazing negotiations on behalf of borrowers when they have been in financial hardship. These range from payment holidays, interest rate reductions, interest free periods, to even in one occurrence, a massive reduction in the outstanding debt.

All the major banks and other lenders are now making it substantially easier for their clients in financial hardship to seek assistance. Often it is much easier for some one to act on their behalf, their real estate agent if the property is going to be sold, their mortgage broker or a solicitor.

Even before asking for special financial assistance you might consider a couple of preliminary options:

  1. See if it is worth consolidating their debts
  2. Do a budget for your client to see ways of saving money or reallocating income to debts. The old “ you could afford that if you gave up smoking/ buying your lunch/foxtel.”
  3. See if changing the loans to interest only will free up enough cashflow
  4. Extend the loan term to reduce payments
  5. See if there is a redraw amount available.

If these options can’t help and there are major problems the borrower can apply for  Financial Hardship Assistance.

Customers with debt problems can generally only apply for assistance if they have experienced some sort of event that has caused their hardship. It is not designed for people who have just decided not to pay their debts.

Some of the circumstances that could be eligible for assistance are:

  • Injury or illness
  • Unemployment
  • Divorce or relationship separation
  • Death of a spouse
  • Natural Disasters
  • Unexpected reduction in income

The types of assistance available will vary depending on individual circumstances. For eligible customers, assistance may include:

  • Repayment arrangements based on what the borrower can afford to pay at the time
  • Reduced repayments
  • Interest adjustments
  • Repayment extension periods
  • Capitalising payments for a period of time up to 12 months
  • Change of loan product to a lower rate

Some lenders will not require evidence of financial hardship and will make arrangements over the phone wherever possible.

Below are the contact details for the major banks:

Commonwealth Bank

NetBank:   Log into NetBank – Go to ‘Manage my accounts’ and select ‘Request a repayment holiday’

Telephone:        1300 720 814, 8am to 9pm Monday to Friday and 9am to 2pm Saturday

Fax:      02 9841 6670

E-Mail: ccsolutions@cba.com.au

In Writing:        P.O. Box 9823 Parramatta NSW 2150

NAB

Phone: 1300 661 114 or contact your Banker/Branch –  number is located on the top left hand corner of  account statement.

St.George

Phone 1800 629 795, 8am to 5pm, Monday to Friday.

ANZ

Department Contact Numbers Hours of Operation
Home Loans, Personal Loans, Credit Cards, Personal Overdrafts and Small Business Loans 1800 252 845 8am – 8pm Monday to Thursday (AEST)
8am – 7pm Friday (AEST)
Esanda 1800 838 100 8am – 7pm Monday to Friday (AEST)

ING Direct

Phone: 02 9028 4347

Bankwest

Customer Help Centre

13 17 18

24 hours 7 days a week

Suncorp

After you have completed the Statement of Financial Position Form and collated your supporting documentation please either:

Phone: (07) 3362 1333 or on 1800 225 223

Post to: Suncorp

GPO Box 1453

Brisbane

QLD 4001

Fax to: (07) 3031 2008

WESTPAC

Speak to Westpac Collections team, tell them you are experiencing financial hardship and need to talk with Westpac’s Financial Solutions team. Or you can call the Financial Solutions team directly on 132 668.

{rokcomments}