> Consumer advice  > Money Matters  > Credit  > Hardship provisions

If after signing a contract with a credit provider, you find you are unable to make the loan repayments as agreed to in your contract, you should speak with the credit provider immediately and try to come to some sort of written arrangement to repay your debt.

If you cannot make the payments due to hardship, for example, you may be sick or unemployed or have other reasonable cause, the contract may be changed if your loan amount is under the hardship threshold amount. In these circumstances, the Consumer Credit Code allows you to apply to your credit provider and ultimately the District Court for a change to your repayment obligations. If you have been served with a default notice you may also be able to apply to the District Court for a postponement of enforcement proceedings (eg. repossession of mortgaged property). The court may decide that your circumstances deserve a more lenient approach and may order your credit provider to make changes to your contract. This does not mean that the debt is reduced or cancelled.


Hardship Threshold Amount

Effective from the 5 November 2004, the hardship threshold amount increased significantly and will continue to change each month. The latest threshold amount is published on the What's New page of the Consumer Credit Code website.

The threshold will now be a floating threshold linked to an Australian Bureau of Statistics (ABS) index of the cost of new houses in Sydney. The hardship threshold will be equal to 110% of the average price for new dwellings in New South Wales. This figure is released monthly by the ABS and set out in the Table of Housing Finance Commitments in the publication entitled Housing Finance Australia. Note that the figure released by the ABS is based on the most recent data, which is usually about 2 months previous.

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