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.