Financial woes and getting help through counselling

Financial counselling and how it can help your financial woes.

If you're struggling with financial problems then it can help to have an objective, third party assist you. Financial difficulties may arise when you lose your job, have had your hours reduced, have an illness or have over committed. Don't wait until the problem is catastrophic, seek help early and you will have more options available. There are a few agencies around Australia that provide face-to-face counselling and also counselling by phone.

1)Financial Ombudsman Service (www.fos.org.au) 1300 78 08 08- Fair and independent dispute resolution for consumers and financial service providers
2)Care Inc Financial Counselling Service (www.carefcs.org) - Based in Canberra, offering drop-in programs and limited hours phone service
3)MoneyHelp Financial Counselling (www.moneyhelp.org.au) 1800 149 689 - A Victorian State Government initiative offering tools and advice for those who lost their jobs and struggle with bills and debts.

Some solutions that they may help you to negotiate if you don't know how to negotiate yourself include: budgeting assistance, negotiating a revised repayment schedule, extension of time on bills and debts due on certain dates, reduced interest rates, moratorium on payments for a period of time until you are able to meet your repayments in full.

It's may be too late to seek help when you're being serve a 'default notice' (borrowers have to pay overdue amounts within 30 days) or a 'statement of claim' which is calling in the loan due to failure to pay the default notice previously issued.

Never ignore your financial problems.

1) Contact your creditors straight away and request hardship variation. Most creditors will either assist you with organising a payment plan or a moratorium on their bills.

2) Prepare an income and expenditure statement (budget) list for your creditors. Submit your requests in writing.

3) Keep your creditors in the loop regarding your financial situation and do not ignore their correspondence. Seek help for anything you do not understand anything.

4) If they refuse to negotiate, request them to review their decision. If you are unhappy with their response, contact the financial counselling services listed above for assistance.

5) If they threaten legal action, ensure you see legal or financial assistance/counselling immediately.

6) Your Financial Services Provider may not alter your repayments and they don't have to. However, they 'must look at your current financial postion' and possibly ask you for more information 'to asses how they may be able to assist you.'

7) The Financial Ombudsman Service can award compensation on fees and interest if the Financial Services Provider has not followed procedures correctly.

Starting from January 2010, as a last resort, the Financial Ombudsman Service can now make the credit provider change the repayments for some credit contracts depending on the type and size of the credit facility:

* Most credit card contracts
* Personal loans
* Car loans
* Some home loans from January 2011 (if they are less than $500,000)

The will only pursue this option after they have analysed your financial situation and ability to meet a variation to the credit contract. Seek help as soon as you start experiencing financial difficulties. With a bit of good planning, you may beable to avert bankruptcies and financial disaster by negotiating new arrangements with creditors unti you can resume payment again.

Superannuation contribution limits

Were you planning to make extra contributions to your super fund by salary sacrificing? Beware that you do not exceed your Contributions Cap.

Working Australian Residents:

There are strict penalties if you exceed your Contributions Cap - you will be personally liable for the new tax - Excess contributions Tax. It is your responsibility to monitor your contributions.

Calculating the amount of your voluntary concessional contributions allowable to prevent the Excess contributions tax:

2009/2010 Concessional contributions cap for individuals under 50 years of age = $25,000 - 9% SG portion

2009/2010, 10/11, 11/12 Concessional contributions cap for individuals aged 50 and over = $50,000 - 9% SG portion

2009/2010 Non-concessional contributions cap is $150,000/annum. In future, the cap will be calculated as 6 times the level of the indexed concessional contributions cap.

Temporary Residents in Australia

If you hold an eligible temporary resident visa (Visa), you must claim your super benefit from your super fun within 6 months after the Visa being cancelled/expiring and you have left Australia. If this is not done within 6 months after the Visa ceases to be in effect and you have left Australia, then the money will be paid to the Commissioner as 'unclaimed money'. This can still be claimed from the ATO on 13 10 20. Your super fund is not obliged to notify orgive an exit statement to you when they transfer your superannuation to the ATO after you depart from Australia.

There are also limited conditions of release available to all temporary resident members (irrespective of whether or not they have left Australia):

* Death

* Terminal medical condition

* Permanent incapacity

* Departing Australia permanently to Temporary Residents who apply in writing for the release of their benefits

* Trustee payments to the ATO under the Superannuation (Unclaimed Money and Lost Members) Act 1999

* Temporary incapacity and/or

* Release Authorities under the Income Tax Assessment Act 1997