What banks and lenders must do when you can't make repayments
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If you're struggling with credit card debt, personal loans, or other credit — you have a legal right to ask your lender for help. They must genuinely consider your application and respond within 21 days. Missing payments without an arrangement can lead to a default that stays on your credit report for 5 years.
This is general information, not financial or legal advice. For help with your specific situation, call the National Debt Helpline on 1800 007 007 (free, confidential).
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 must consider your request and respond within about 21 days. If they say no, they must tell you why in writing and how to complain to AFCA. Options you can ask for include reduced repayments, a repayment pause, an interest rate freeze, fee waivers, or a longer 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, 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.
You can ask your lender to extend the loan term, reduce or defer repayments, pause interest, waive fees, or restructure the debt. In severe cases, part of the debt may be written off. Fee waivers and reduced repayments are the most common forms of help.
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.
Select your state above to see local ombudsmen, grants, and contact numbers.
Usually not at first. Most creditors start with questions, not documents, and many ask about your income, spending and debts. Some want documents or a full statement before deciding, especially for longer help or a waiver.
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If they ask for a ‘statement of financial position’, it usually means a full list of your income, spending, debts and what you own.
Many banks ask about your income, spending, debts and what you own when you apply. Some online forms ask for a full statement first; later, some ask for documents such as payslips or a medical certificate.
Less information is usually right for first-time, short-term help, says the banks' industry guideline. It says you should be able to give information over the phone where appropriate. It also says banks should not make you speak to a financial counsellor before helping.
The lender can ask for information within 21 days of your request. The information must be relevant to deciding the request, and if it asks, you have to give it.
Banks that signed the Banking Code take into account the information they have, including what you tell them about your situation. They won't require you to access your super, unless you're borrowing for a self-managed super fund.
Customer-owned banks, such as credit unions and mutual banks, that signed their own code may ask for the financial information and documents they reasonably need before helping.
Those customer-owned banks won't record a default on your credit report, unless the law requires it, or sell the debt while they consider your request.
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If they ask for a ‘statement of financial position’, it usually means a full list of your income, spending, debts and what you own.
Some lenders' forms ask about your income and spending, what you can afford, or access to your bank statements.
The lender can ask for information within 21 days of your request. The information must be relevant to deciding the request, and if it asks, you have to give it.
Lenders that joined the Finance Industry Code may ask you for information, and may decline if they don't have enough information to support your hardship.
Ask for a ‘financial hardship variation’. Use that exact phrase.
“I'm having trouble making my repayments and I'd like to apply for a financial hardship variation.”
A financial counsellor can negotiate with companies on your behalf — for free.