How to stop the cycle and start a plan
Thousands of Australians resolve serious debt situations every year, many with debts larger than yours. There are formal hardship protections in Australian law, free professional help through the National Debt Helpline, and options most people don't know about. Here's how to start.
Need to talk to someone? 1800 007 007 — National Debt Helpline, free and confidential.
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We'll show you local numbers, services, and rights specific to your state.
Check off each step as you go. Your progress is saved.
The first step is to stop the cycle. No new credit cards, no payday loans, no borrowing from friends. If you're using credit to pay credit, it's time to break the pattern. Cut up the cards if you need to — you can always get new ones later.
Write down every debt: who you owe, how much, the interest rate, and the minimum payment. Include everything — credit cards, personal loans, buy now pay later, money owed to family, car finance, everything. You can't make a plan until you see the full picture.
Call 1800 007 007 and speak to a free financial counsellor. They see situations like yours every day. They can talk through your options, help you apply for hardship programs, coach you on what to say to creditors, and refer you to a face-to-face financial counsellor who can negotiate on your behalf. This call is the single most important thing you can do.
If debt collectors are calling, know this: they cannot harass you, they can only call at certain times, you can request communication in writing only, and you can dispute the debt. See the debt collector rights section below. You have more power than you think.
Banks, credit cards, personal loans, energy, phone: all must consider a hardship request and respond. Call each one and ask for hardship assistance. They may pause repayments, reduce interest, waive fees, or extend terms. You have a legal right to ask, and they must genuinely consider your request.
Some old debts may be 'statute-barred' — meaning the creditor can no longer take you to court. In most states, the limitation period is 6 years from the last payment or written acknowledgment. A financial counsellor can check this for you. Warning: making a payment on a statute-barred debt can restart the clock.
For serious debt, there are formal options: a Debt Agreement (Part IX) lets you pay back a portion of your debts over time. Bankruptcy is a last resort but gives you a fresh start. A financial counsellor will help you understand if either is right for your situation — never make these decisions alone.
Your rights, who to call, and free services — everything in one place.
You can apply for a hardship variation on any loan, credit card, car finance, or mortgage. Since June 2025, buy now pay later services like Afterpay and Zip are also covered. Call your lender's hardship team (not general customer service) and tell them you're experiencing financial hardship and would like to discuss your options.
Your lender must respond to your hardship notice within 21 days. If they need more information, they must request it within 21 days, then respond within 21 days of receiving it. NAB was fined $15.5 million in 2025 for failing to respond to 345 hardship customers — this law is enforced.
Your lender can't just rubber-stamp a rejection. They must genuinely assess your situation, consider what you can afford, and offer alternatives. Common options include: reduced repayments, repayment pause (3-6 months), interest rate freeze, fee waivers, or extending the loan term.
If you give your lender a hardship notice, they cannot START court enforcement until they have given you a written decision saying you have not agreed, and 14 days have passed since that notice. They can still send a default notice in the meantime, and can still take mortgaged goods if they reasonably believe you are disposing of them or urgent action is needed to protect them. The protection does not apply if you gave a hardship notice on materially the same basis in the previous four months. Ask them, in writing, to pause collection activity while they assess it.
When you enter a hardship arrangement, a note appears on your credit report — but it cannot be used to calculate your credit score, and it's removed 12 months after the arrangement ends. A default listing, on the other hand, stays for 5 years and seriously damages your ability to borrow. Asking for help early is one of the best ways to avoid a default.
Lenders should consider: extending the loan term, reducing or deferring repayments, pausing interest, waiving fees, or restructuring the debt. In severe cases, partial debt write-off may be offered. Fee waivers and reduced repayments are the most common forms of assistance.
If your lender refuses your hardship request or offers inadequate help, you can lodge a free complaint with the Australian Financial Complaints Authority. AFCA can order the lender to vary your contract, refund fees, reverse interest charges, and award compensation up to $631,500 for direct loss.
Debt collectors must tell you who they are, who they're collecting for, and the amount owed. They must also confirm the debt is actually yours.
Collectors cannot use threats, aggressive language, or intimidation. They cannot imply criminal consequences for unpaid debt (most debts are civil, not criminal).
Collectors cannot contact you excessively. Generally: max 3 phone calls per week, max 10 per month. No calls before 7:30am or after 9pm on weekdays, before 9am or after 9pm on weekends, and none on national public holidays.
You can tell a collector you only want to communicate in writing. This gives you time to think, get advice, and have a paper trail.
You can tell a collector not to contact you at your workplace. If you tell them to stop, they must stop.
You can ask the collector to verify the debt — prove it's yours, prove the amount, and prove they have authority to collect it. They must pause collection while verifying.
Debts have a limitation period (typically 6 years in most states). After this period, the creditor cannot take you to court — though they may still contact you. Making a payment or acknowledging the debt can restart the clock.
If a debt collector breaches these rules, you can complain to AFCA (for financial services debts) or the ACCC. You can also complain to your state's fair trading body.
Tap any number to call directly. Tell them you're experiencing financial hardship.
What to say: Ask for 'financial assistance'. They can defer loan repayments, reduce credit card minimums, pause fees, and restructure debt.
Your right: CBA must consider your hardship request and respond, generally within about 21 days.
What to say: Ask for 'financial hardship assistance'. Options include loan deferrals, reduced repayments, and fee waivers.
Your right: Must respond to hardship applications within 21 days and offer genuine alternatives if they decline.
What to say: Ask for 'financial difficulty support'. They can pause repayments, extend loan terms, and waive fees.
Your right: Must respond within 21 days. If they refuse, you can escalate to AFCA for free.
What to say: Ask for 'NAB Assist'. They offer payment pauses, reduced repayments, and restructured loans.
Your right: Must assess your situation and respond, generally within about 21 days.
What to say: Ask for 'financial hardship assistance'. Options vary by product type.
Your right: Must respond to hardship notices within 21 days.
What to say: Ask for 'financial hardship support'. They can defer home loan repayments and adjust personal loan terms.
Your right: Must genuinely consider your hardship request and respond within 21 days.
What to say: Ask for the 'Staying Connected' hardship program. They must work with you on a payment arrangement you can afford.
Your right: Under the National Energy Retail Law, AGL must not disconnect you while you're on a hardship plan and meeting your obligations.
What to say: Ask for the 'Power On' hardship program. Request a payment plan, energy audit, and concession check.
Your right: Origin must work with you on payment options, including direct Centrepay billing, and cannot disconnect you while you are keeping to an agreed payment plan (in NSW, QLD, SA, TAS and the ACT). Talking to the hardship team is not itself a protection — get the plan agreed.
What to say: Ask for the 'EnergyAssist' hardship program. They can offer payment plans, debt waivers, and usage reduction support.
Your right: EnergyAustralia must assess your capacity to pay and set affordable repayment amounts.
What to say: Ask for their hardship program. Request a payment plan that matches your income cycle.
Your right: Must work with you on flexible payment options and not disconnect while you're on the hardship program.
What to say: Ask for their hardship assistance. They can reduce payments and set up Centrepay deductions.
Your right: Must work with you on a manageable payment arrangement.
What to say: Ask for 'financial hardship assistance'. They can offer payment extensions, spend controls, and switching to a cheaper plan with no break fees.
Your right: Telstra must consider your hardship request and work with you on a payment arrangement, and must not disconnect while you're engaging in good faith.
What to say: Ask for 'financial hardship support'. Options include payment plans, spend management tools, and plan downgrades.
Your right: Must consider your hardship request and work with you on a payment arrangement before taking any restriction or disconnection action.
What to say: Ask for 'financial hardship help'. They can set up a payment plan, reduce your plan cost, or apply credits.
Your right: Must work with you on an affordable payment arrangement before disconnection.
What to say: Ask for 'financial hardship assistance'. They can defer payments and adjust plan costs.
Your right: Must consider your hardship request and work with you on a payment arrangement.
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Last updated: . This guide is for general information only and is not financial or legal advice. For personalised help, call the National Debt Helpline on 1800 007 007.
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