What is financial hardship?
Financial hardship is when you are temporarily unable to make a repayment on a debt, such as a credit card, home loan or personal loan.
The causes of financial hardship can include sickness, natural disaster, unemployment or over-commitment to credit arrangements.
The Australian Financial Complaints Authority (AFCA) can help people in financial hardship sort out disagreements with their bank, mortgage provider or other financial firm.
Making a complaint is free. If you need help, we provide a range of accessibility and support services, including information about our services in different languages.
What to do when you are in financial hardship
If you are in financial hardship, you should contact your financial firm as soon as possible to discuss your situation. You and your firm can make a hardship arrangement - this is a simple plan to help you deal with your repayments. If you are unable to agree on a hardship arrangement, you can make a complaint to AFCA.
Most financial firms have a dedicated support team to assist customers facing financial hardship. You can look up your financial firm’s contact details using our Find a financial firm tool.
Small businesses in hardship
Small businesses experiencing difficulties making repayments should contact their financial firm as soon as possible.
It is important to know that small businesses do not have the same ‘financial hardship’ rights as individuals. However, under the Banking Code of Practice, a small business can still ask their firm for assistance with “financial hardship”. If you are unhappy with the financial firm’s response, contact AFCA.
For more information read AFCA’s small business complaints page.
How AFCA helps with financial hardship complaints
If you are unhappy with your financial firm’s response, or you don’t hear from them at all, you can make a complaint to AFCA.
If you need help, AFCA has support available – such as information in multiple languages, and ways to communicate with us if you are deaf, hard of hearing or have other needs.
If you have any problems or questions, you can call us on 1800 931 678.
When you make a complaint to us, we will ask you to complete a statement of financial position to tell us about your financial situation and how you plan to repay the debt.
Complete a statement of financial position
Types of financial hardship complaints AFCA can consider
Types of complaints AFCA can consider, include:
- Your financial firm has declined your financial hardship request: You have asked your financial firm for assistance, but the financial firm declines and makes no alternative offer, or does not provide reasons for their decision.
- Default notices: Your financial firm has sent you a default notice when you are experiencing financial hardship (regardless of whether you have requested assistance or not).
- No response from financial firm: Your financial firm fails to respond to your request for assistance due to your financial hardship. Your request doesn’t have to be through a formal process, any contact where you ask for assistance can count.
- Request to suspend enforcement proceedings: Your financial firm continues action against you to recover a debt after you have made a financial hardship request. This includes your financial firm continuing or starting legal proceedings, or if you are contacted by debt collectors.
- Default court judgement: We may be able to assist you in specific circumstances if you have received a default judgment about an outstanding debt with a financial firm and they have declined your request for assistance in repaying the judgment debt.
What happens after you make a complaint
After AFCA receives your complaint, we send the details to your financial firm and encourage them to contact you quickly to find a solution. If an agreement can’t be made, AFCA will assign a case worker from our financial hardship team to investigate your complaint.
The case manager may organise a conciliation conference, which is when AFCA leads a discussion between you and your financial firm to find a fair solution.
If the complaint is not resolved at a conciliation conference, or we think a conciliation conference is not right for your complaint, then AFCA can make a final decision on the complaint.
Read more about the process we follow.
Complaints about early release of superannuation
AFCA sometimes receives complaints about when an individual asks their financial firm to provide an early release of super letter for the ATO. To learn more about this kind of complaint and how AFCA handles them, read AFCA’s early release of super approach document.
The ATO has more information on the early release of superannuation.
Other financial hardship resources
Other financial hardship resources
Assistance and information about financial hardship
- National Debt Helpline: 1800 007 007
- Small Business Debt Helpline: 1800 413 828
- Find a financial counsellor near you
- MoneySmart Budget Planner
- Australian Banking Association – financial hardship contacts.
If your financial firm is not an ABA member, you can also check with the Customer Owned Banking Association (COBA), and for broker contact information, visit the Mortgage and Finance Association of Australia (MFAA)’s Mortgage and Finance Help page.
AFCA's Approaches to financial hardship
- Financial Hardship – our power to vary credit contracts [PDF]
- Financial Hardship – principles, code and good practice [PDF]
- Financial Hardship – working together to find solutions [PDF]
- Financial Hardship – dealing with common issues [PDF]
- Financial Hardship – early release of super [PDF]