COVID-19 has impacted businesses and people across Australia. Many people have lost theirjob or had their income significantly reduced. This can make it hard to manage financial commitments like rent, mortgages and debt.
Anyone can have money problems and you should not feel embarrassed to seek help and take action. If you have no income or cannot afford basic needs, there is help at hand – you can find your closest support service on the Ask Izzy website.
If you are falling behind in your financial commitments, you can take steps nowto prevent major legal problems later.It is important that you make a good financial plan and talk to your creditors about your financial hardship as soon as possible. Below, we have collated useful information to help you look after yourself and your family financially:
Making a financial plan
Falling behindin rent
Mortgage and home loans
Utility bills and Council rates
Take charge and make a financial plan
The first thing you should do to manage your finances is to make a realistic plan to manage your debts, seek extra funds and avoid extreme financial hardship. If you don’t fully understand your financial position or know where to start, you can call the National Debt Helpline on 1800 007 007 for free financial counselling.
If you can’t pay your utilities bill or council rates, you should contact your utility provider or local Councilto negotiatea repayment option that is affordable for you.
In response to COVID-19, the Australian Government and regulators have set out minimum standards expectedof Councils, as well as energy, water and telecommunications providerstonegotiate with people in financial hardship.
Under these principles, you should expect the following minimum standards when negotiating with your provider:
Your provider should offer you a payment plan or hardship arrangement if you indicate that you are in financial stress
Your provider should be flexible in changing your agreed payment plan if your circumstances change
Your services should not be disconnected without your agreement
Your provider should not refer your debt to a debt collector
If you are unhappy with the options your provider offers you, you can ask them to review their decision in accordance with these principles.
If you live in Victoria and are an eligible concession card holder, you may be eligible for assistance from the Utility relief grant scheme. For more information, have a look at the Utility relief grant scheme web page on the Victoria Government’s Department of Health and Human Services website.
Managing other debts
Losing your income may also affect your ability to manage repayments of other debts, for example:
Personal loans with banks and other credit providers, including payday loans
It is always a good idea to have a clear repayment plan between you and your creditor that sets out when and how you are required to repay the loan. Once you have agreed on a repayment plan, it is important that you do your best to follow it to avoid enforcement action by creditors, such as:
Selling the debt to a debt collection agency, or
Commencing proceedings against you at court.
Enforcement actions can complicate things and increase your debt because of interest and legal costs. It is always best to take active steps to liaise with your creditor to agree on repayment plans that you can afford.
If your creditor has already commenced bankruptcy proceedings against you, you can find out what this process means by looking at our bankruptcy resources.
This resource was last updated on 25 March 2021. This is legal information only and does not constitute legal advice. You should always contact a lawyer for advice specific to your situation. Please view our disclaimer for more information.