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Sample Hardship Letter to Credit Card Company

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Sample Hardship Letter to Credit Card Company document sample

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									Commercial Division
Fact Sheet

     Consumer Credit
             Hardship Variation
            This fact sheet can help you understand what you need to do when you cannot make your
            repayments and you want to apply to the CTTT for a hardship variation of your credit contract.

                                                         What is a ‘hardship variation’?
                                                         A hardship variation means you are asking the CTTT to order the credit
                                                         provider to vary or change your credit contract for a time because of
                                                         temporary hardship.

                                                         You can apply for a hardship variation if you are having difficulties making
                                                         repayments because of illness, unemployment or other reasonable
                                                         cause.


                                                         How do I apply to the CTTT?
 Getting help                                            Step 1:    Before making an application to the CTTT, you should write
                                                         to your credit provider to change your credit contract. Ask them not to
 Consumer Credit Legal Centre
                                                         take any enforcement action while you try to come to an agreement.
 The Consumer Credit Legal Centre (CCLC)
                                                         Sample letters are available from the Consumer Credit Legal Centre
 provides financial counselling information, advice
 and referrals to NSW consumers on credit,
                                                         (see Getting Help).
 debt and banking issues. The service provides           Step 2:    If you have asked your credit provider to change the contract
 information and strategies for dealing with financial
                                                         and it has not, you can apply to the CTTT’s Commercial Division to change
 difficulties and negotiating with creditors.
                                                         your contract. Application forms are available from www.cttt.nsw.gov.au,
 CCLC have a number of sample letters and                CTTT Registries and Fair Trading Centres.
 can provide assistance with completing your
 hardship variation application to the CTTT. Visit       Step 3: For the CTTT to consider your hardship variation application
 www.cclcnsw.org.au or telephone 1800 808 488.           you must show ALL of the following:

 Legal Aid                                                     Your credit contract is mainly for personal, domestic or household
 Legal Aid provides a range of services to people              purposes only (not for business or investment) such as a home loan
 who need advice, assistance and representation,               or credit card
 and who qualify for legal aid. Legal Aid also
                                                               The amount that may be lent under the credit contract is less than the
 provides a series of publications about issues
                                                               hardship threshold amount (see What is the hardship threshold?)
 arising from mortgage stress. Visit www.legalaid.
 nsw.gov.au or for telephone advice contact Law                You cannot make repayments because of illness, unemployment or
 Access on 1300 888 529.                                       another reasonable cause

 LawAccess NSW                                                 You can meet the new repayments you are proposing
 LawAccess NSW is a free government telephone                  You can repay the loan in a reasonable time.
 service that provides legal information, advice
 and referrals. Visit www.lawaccess.nsw.gov.au or        Before lodging your application, you should seek advice and assistance
 telephone 1300 888 529.                                 (see Getting Help).

 Office of Fair Trading
 The Office of Fair Trading provides a specialist
                                                         When can I apply?
 support unit to assist with credit problems             Applications for hardship variation may be made at any time up until a
 before enforcement action has started.                  court makes an order against you. If proceedings have begun in the Local,
 Visit www.fairtrading.nsw.gov.au or telephone           District or Supreme Court you can still apply for hardship variation at the
 (02) 9895 0297.
                                                         CTTT, but you should seek legal advice immediately.



June 2008                                                                                                             CTTT-FS-COM01
www.cttt.nsw.gov.au



What is the hardship threshold?                                                Case Study: Steve’s story
The hardship threshold is a “floating threshold” linked to the Australian
                                                                               Steve was seriously injured in a car accident. He took 4
Bureau of Statistics (ABS) index of the current cost of new houses in
                                                                               months off work to recover but lost his contractor’s job
Australia.
                                                                               as a result.
The hardship threshold changes monthly. Visit www.creditcode.gov.au
                                                                               Without his weekly income, Steve couldn’t make his
or telephone one of the organisations listed under Getting Help to find
                                                                               personal loan repayments.             He wrote to the finance
out the current hardship threshold amount.
                                                                               company to explain his situation and asked them to
                                                                               postpone the repayments until he got better. The finance
What ‘orders’ can I ask for?                                                   company refused.

The CTTT can make orders about hardship variation under the Consumer           Steve made a hardship variation application to the CTTT
Credit Code. You can ask the CTTT to make orders to:                           to have his repayments postponed for 4 months. At the
                                                                               hearing, Steve gave evidence of his medical situation
   • Extend the period of the loan and reduce payments accordingly
                                                                               and had a letter from his former employer saying they
   • Delay payments due on a specific date                                     would re-employ Steve when he was well and fit to
   • Stop making payments for a period of time and extend the period           return to work. The finance company argued they could
     of the loan accordingly.                                                  not keep Steve’s account open with no repayments.

In your application, under the heading “What orders do you want?”              The Tribunal Member asked Steve if he was able to make
describe the orders that you want the CTTT to make. For example:               smaller repayments during his recovery. Both Steve and
                                                                               the finance company agreed to a minimum payment and
      “I seek an order under section 68 of the Consumer Credit Code to         CTTT orders were made.
      vary my loan repayments on the grounds of hardship”.


What if enforcement action has                                                                  CTTT Registries
begun?                                                                                       Telephone: 1300 135 399
As part of your hardship variation application, you may also ask for an                       Facsimile: 1300 135 247
urgent stay of enforcement action.                                                              TTY: 02 9641 6521
The same criteria apply for a hardship variation (see How can I apply?).                    Website: www.cttt.nsw.gov.au
Include evidence that enforcement has begun or is about to begin, such         Sydney Registry                     Penrith Registry
as a letter from the credit provider or a notice of court proceedings. Also    Level 12, 175 Castlereagh Street    Level 1, 308 High Street
include a copy of the credit contract or a recent loan statement.              Sydney NSW 2000                     Penrith NSW 2750
                                                                               GPO Box 4005, Sydney 2001           GPO Box 988, Penrith 2751

What should I bring to the hearing?                                            Liverpool Registry                  Tamworth Registry
                                                                               Level 3, 33 Moore Street            Suite 3-5 Kable Korner Complex
At the hearing you will need to prove that you meet the requirements for
                                                                               Liverpool NSW 2170                  Cnr Kable Avenue & Darling St
a hardship application.                                                        PO Box 723, Liverpool BC 1871       PO Box 1033 Tamworth 2340

Bring evidence with you to the hearing, such as:                               Parramatta Registry                 Hurstville Registry
   • A copy of your credit contract or a recent loan statement                 Level 2, 10 Valentine Avenue        Level 3, 4-8 Woodville Street
                                                                               Parramatta NSW 2150                 Hurstville NSW 2220
   • Records of payments which you have made in the past                       PO Box 4117, Parramatta 2124        PO Box 148, Hurstville BC 1481
   • A copy of your letter to the credit provider asking for changes to        Wollongong Registry                 Newcastle Registry
     your repayment arrangements because of hardship
                                                                               Level 3, 43 Burelli Street          Level 1, 175 Scott Street
   • The response from your credit provider                                    Wollongong NSW 2500                 Newcastle NSW 2300
                                                                               PO Box 319, Wollongong 2520         PO Box 792, Newcastle 2300
   • Doctor certificates about the state of your health
   • Letter of termination or redundancy from your employer                                Fair Trading Centres
   • Documents showing your current income, payslips, letters from                            General enquiries: 13 32 20
     your current employer                                                             Website: www.fairtrading.nsw.gov.au
   • A list of what you own and any debts you have to pay.
You should also write down why you think your request is reasonable.          This fact sheet provides general information only. It is not provided as
                                                                                        legal advice and is intended as a general guide only.
Describe how you are going to be able to repay the loan in a reasonable
                                                                              If you have a legal issue or query you should refer to the legislation or
time if the CTTT makes the orders.                                                                       seek legal advice.




June 2008                                                                                                                           CTTT-FS-COM01

								
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