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Mortgage stress handbook

13. Sample letters and forms

Please delete those parts of the sample letter that do not apply to your circumstances.

Manager

Use contact details for the lender at www.fos.org.au or www.cosl.com.au.

Dear Manager,

RE: Request for change on the grounds of hardship

Loan account no.

I wish to apply for a variation of the above loan contract on the grounds of hardship under section 72 of the National Credit Code (Schedule 1 of National Consumer Credit Protection Act 2009) (‘NCC”).

I assume you will stay all enforcement action while you consider this application. If this is not possible, please let me/us know immediately in writing.

Section 72 of the NCC sets out the general principle that a debtor who is unable, reasonably, because of illness, unemployment or other reasonable cause to meet their obligations under a credit contract but reasonably expects to be able to repay the debt if the contract is changed in the ways described, may apply to the lender for such a change.

Illness, unemployment or other reasonable cause

I/we have been in financial hardship because of illness and/or unemployment and/or (examples of other reasonable causes are family breakdown, decreases in income, children’s illnesses, and/or caring responsibilities).

The details of my/our illness/unemployment and/or other reasonable cause are as follows:

(Give Details e.g. I was unwell with a heart condition for 6 months ending in February 2009. A medical certificate is attached.)

Expectation of being able to reasonably repay the loan if the variation is granted

I/we expect to be able to reasonably repay the loan if the requested variation below is granted. I/we have been paying loan repayments of $ per fortnight/per month while I/we have been in hardship.

I/we have now returned to work and can now afford the scheduled repayments on the loan OR

I/we expect to return to work on [give date or number of months] and then I/we believe will be able to afford the scheduled loan repayments

The requested change to the contract

I/we request the following change to his/her/their contract:

A reduction of the amount of each repayment to $ per week/fortnight/month. This change is requested for [number of months] months. The term of the loan will be extended and any arrears will be added to the loan (capitalised).
AND/OR

Postponing the repayment due on           /           /          so that it is now due on           /           /          .
AND/OR

Postponing the repayments due between           /           /          and           /           /          and extending the term of the loan.

I/we assume that you will not continue to charge default fees, default interest or make an adverse listing on my/our credit report while my/our hardship request is being considered.

In support of my/our application I/we give the following details:

Details of income and expenditure

Current income is: $              per week/fortnight/month

Current major expenses are:

Mortgage: $              per week/fortnight/month

Other loan repayments: $              per week/fortnight/month

Please send a detailed Financial Statement of Position to be completed by me/us, if required.

As can be seen from the above information, I/we will be able to discharge my/our obligations under the above contract if you agree to the proposed change. I/we ask that you consider this application as a matter of urgency.

I/We await your reply in writing within 21 days of the date of this letter.

Yours faithfully,

Name

Address

Application for Financial Hardship to the Federal Magistrates Court

Note: If the lender has commenced proceedings in another court you need to lodge a dispute with a dispute resolution scheme or the Court where the lender commenced proceedings. The sample form below is to be used only when no court proceedings have been commenced against you.

You would usually only use this form if your lender is not in a dispute resolution scheme (see Chapter 7) or you have been unsuccessful in a dispute resolution scheme.

Instructions for completion

APPLICATION – General Federal Law
  1. This form is used for commencing a general federal law proceeding where no other form of application is applicable under the Federal Magistrates Court Rules 2001 (the Rules).
  2. Do not use this form if your application relates to family law, child support or matters arising under the Bankruptcy Act 1966, Administrative Decisions (Judicial Review) Act 1977 or Migration Act 1958. Ask registry staff for appropriate forms in these jurisdictions.
  3. You must complete address for service details in the footer on page 1. All correspondence concerning the application will be sent to the mailing address inserted and all documents in the proceedings will be deemed to have been served on you if posted to that address. If your address details change, you must file a notice of address for service within seven days, and serve a copy on all other parties; see Rule 6.02.
  4. You must insert the name/s and address/es of each respondent in the ‘Important Notice to Respondent/s’ box at the end of the form.
  5. The grounds of the application must explain briefly the basis on which the orders are sought. Alternatively, you may file a pleading by way of a statement of claim or points of claim. Such a pleading should comply with Orders 11 and 12 of the Federal Court Rules. It should identify in summary form the material facts on which you rely, but not the evidence by which those facts are to be proved. All necessary particulars must be given, including any claim of fraud, misrepresentation, breach of trust, wilful default, undue influence and damages.
  6. The evidence supporting this application must be provided by affidavit/s filed with this application; see Subrule 4.05(1). The affidavit must include a full narrative of all facts, matters and circumstances, including documentary evidence, upon which you rely. However, an affidavit is not required in certain circumstances; see Subrule 4.05(2).
  7. Unless the Court orders otherwise, an application and other documents filed with it may not be served less than seven days before the day fixed for the hearing of the application; see Rule 6.19. Service must be by hand, unless the Rules allow otherwise or the court otherwise orders. The application and other documents must be served on each party and the person against whom orders are sought if that person is not a party.
  8. If your application is for interlocutory, interim or procedural orders in a proceeding which has already commenced, you should use the Application in a Case form.
  9. If you are completing this application by hand and you need more space in any section, attach extra page/s as required.
  10. Once complete, you need to file the original and a copy of this application for each party to the matter with the court registry. The Court will keep the original and return the sealed copies to you. You will need to serve a copy on the other party or parties and keep a copy for your records.

Remove this instruction sheet before filing


IN THE FEDERAL MAGISTRATES COURT File number
OF AUSTRALIA

REGISTRY: (eg Sydney)

(Name)
Applicant

(Name of credit provider)
Respondent
* Repeat as necessary for additional parties

APPLICATION—General Federal Law

Type of application

This application is commenced in the court’s jurisdiction under the (specify Act or Acts): ..........................................................................................

National Consumer Credit Protection Act 2009

First court date

This application is listed for hearing at (court location):

.............................................................................................................

Court date and time (registry staff to insert): / / at am/pm.

All parties or their legal representatives should attend this hearing. Default orders may be made if any party fails to attend. The court may hear and determine all interlocutory or final issues, or may give directions for the future conduct of the proceeding.

(for) Registrar
Date: / /

Filed on behalf of (name)
Prepared by Lawyer’s code
Name of law firm
Address for service in Australia
State Postcode
Email
DX Tel
Fax Attention


Final orders sought by applicant/s

(state precisely each order sought by way of final relief)

  1. An order pursuant to s74 of the National Credit Code (“the Code”) being Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth) changing the Credit Contract as follows:
    1. The date for payment of $#### which fell due on #### is postponed until the date of judgment.
    2. Any arrears of the Credit Contract as at the date of judgment are capitalised.
    3. The period of the contract is extended for a term of thirty (30) years commencing on the date of judgment during which the defendant is to pay the amount due on the contract as at the date of judgment together with interest thereon by monthly instalments without a change being made to the annual percentage rate or rates provided in the contract.
  2. Such further or other order as the court thinks fit.
Grounds of application

(state briefly the grounds of the application)

  1. The Applicants are the registered proprietors of and reside at the property in Certificate of Title Folio Identifier [number on certificate of title] also known as [address] (“the home”).
  2. On or about [date of loan] the Respondent, in the course of its business, pursuant to an agreement between the Applicants and the Respondent (“the Credit Contract”) gave the Applicants a loan (“the Loan”) secured by a mortgage over the home (“the Mortgage”).
  3. The Loan was obtained by the Applicants wholly or predominantly for their personal, household or domestic purposes [(or, if applicable, and the credit contract was entered after 30 June 2010) for the purpose of purchasing, renovating or improving residential property for investment purposes].
  4. In the premises the National Credit Code (“the Code”) applies to the Credit Contract and Mortgage.
  5. The Applicants are unable reasonably because of [state which of illness or unemployment or other reasonable cause applies (if other reasonable cause, state the reason)] to discharge their obligations under the Credit Contract.
    Particulars
    1. [the details, including dates, of your illness, unemployment or other reasonable cause which is the basis of your application.]
  6. The Applicants reasonably expect to be able to discharge their obligations under the Credit Contract if the terms of the Credit Contract were changed in the manner provided for in s72(2)(c) of the Code.
    Particulars
    1. [details of arrears, including the total amount; details of payments of the arrears, including dates; the present payment arrangement.]
    2. [details of income and expected means of repaying the loan]
  7. The Applicants have applied to the Respondent for the Credit Contract to be changed in accordance with s72 of the Code and the Respondent has failed or refused to change the Credit Contract in accordance with the application.
    Particulars
    1. Written application to the Respondent on or about [date].
    2. Letter of rejection dated about [date] [(Alternatively) The Respondent did not reply to the letter within 21 days].
  8. In the premises, the Court may change the terms of the Credit Contract pursuant to s74 of the Code.

Interlocutory, interim or procedural orders
sought by applicant/s

(complete only if interlocutory, interim or procedural orders are sought)

  1. A stay of enforcement proceedings pending the determination of the Application.
  2. The small claims procedure under the National Consumer Credit Protection Act 2009 apply to the proceedings.

Signature of applicant/s or lawyer

..........................................................................
Signed by (print name/s)

..........................................................................
......... the applicant/s or ......... lawyer for the applicant/s

Date: ............/............/...........

IMPORTANT NOTICE TO RESPONDENT/S

To the respondent (name): .................................................................
.........................................................................................................
of (address): .....................................................................................
.........................................................................................................
* If there are two or more respondents, provide details .........................
.........................................................................................................

You should seek legal advice about this application. You may file a response. If you file a response, you must file and serve the response within 14 days of receiving this application. You may also need to file an affidavit; see Rule 4.05 of the Federal Magistrates Court Rules 2001. If you do not file a response, you must file and serve a notice of address for service before the hearing.

Form approved by the Chief Federal Magistrate for general federal law proceedings pursuant to Subrule 2.04(1A) for the purpose of Subrule 4.01(1) – September 2007

Defence and cross claim

This form is to be used only if the lender has commenced court proceedings against you.

Remember Remember

You should always go to a dispute resolution scheme before filing a defence/cross claim in court (see Chapter 7).

If you are going to court always get legal advice about your case and how to complete the defence.

If you need to lodge urgently and do not have time to get legal advice you should delete points 1 and 3 below and choose not to admit all of the paragraphs in the Statement of Claim or Summons.

All the forms you may need are listed at the end of the sample defence/cross claim.

If there is only one defendant, delete all references to the second defendant.

Defence

The First Defendant and Second Defendant admit the allegations in paragraphs [paragraph numbers] of the Statement of Claim/Summons.
  1. The First Defendant and Second Defendant do not admit the allegations contained in paragraphs [paragraph numbers] of the Statement of Claim/Summons.
  2. The First Defendant and Second Defendant deny the allegations contained in paragraphs [paragraph numbers] of the Statement of Claim/Summons.
  3. The First Defendant and Second Defendant say in further answer to the Statement of Claim/Summons that the Mortgage is regulated by the National Credit Code (“the Code”) pursuant to the National Consumer Credit Protection Act 2009 (Cth).
  4. In a Statement of Cross Claim filed together with this Defence, the First Defendant and Second Defendant seek changes by the Court to the terms of the Credit Contract under section 74 of the Code.
  5. The First Defendant and Second Defendant rely on the matters in the Statement of Cross Claim filed together with this Defence.

Cross Claim

Relief Claimed
  1. A stay of enforcement proceedings pending the determination of the Cross-Claim.
  2. An order pursuant to s74 of the National Credit Code (“the Code”) being Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth) changing the Credit Contract as follows:
    1. The date for payment of $                     which fell due
      on                /                /                is postponed until the date of judgment.
    2. Any arrears of the Credit Contract as at the date of judgment are capitalised.
    3. The period of the contract is extended for a term of thirty (30) years commencing on the date of judgment during which the defendant is to pay the amount due on the contract as at the date of judgment together with interest thereon by monthly instalments without a change being made to the annual percentage rate or rates provided in the contract.
  3. Costs.
  4. Such further or other order as the court thinks fit.
Pleadings and Particulars
  1. The Cross-Claimants are the registered proprietors of and reside at the property in Certificate of Title Folio Identifier [number on certificate of title] also known as [address] (“the home”).
  2. On or about [date of loan] the Cross-Defendant, in the course of its business, pursuant to an agreement between the Cross-Claimants and the Cross-Defendant (“the Credit Contract”) gave the borrowers a loan (“the Loan”) secured by a mortgage over the home (“the Mortgage”).
  3. The Loan was obtained by the Cross-Claimants wholly or predominantly for their personal, household or domestic purposes [(or if applicable and the credit contract was entered after 30 June 2010) for the purpose of purchasing, renovating or improving residential property for investment purposes].
  4. In the premises the National Credit Code (“the Code”) being Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth) applies to the Credit Contract and Mortgage.
  5. The Cross Claimants are unable reasonably because of [state which of illness or unemployment or other reasonable cause applies (if other reasonable cause, state the reason)] to discharge their obligations under the Credit Contract.
Particulars
    1. [the details, including dates, of your illness, unemployment or other reasonable cause which is the basis of your application.]
  1. The Cross-Claimants reasonably expect to be able to discharge their obligations under the Credit Contract if the terms of the Credit Contract were changed in the manner provided for in s72(2)(c) of the Code.
Particulars
    1. [details of arrears, including the total amount; details of payments of the arrears, including dates; the present payment arrangement.]
    2. [details of income and expected means of repaying the loan]
  1. The Cross-Claimants have applied to the Cross-Defendant for the Credit Contract to be changed in accordance with s72 of the Code and the Cross-Defendant has refused to change the Credit Contract in accordance with the application.
Particulars
    1. Written application to the Plaintiff on or about [date].
    2. Letter of rejection dated about [date] [(Alternatively) The Plaintiff did not reply to the letter within 21 days].
  1. In the premises, the Court may change the terms of the Credit Contract pursuant to s74 of the Code.

 

Forms available at:

New South Wales

  1. Form 7B Defence which must be filed within 28 days after service on the defendant of the Statement of Claim
  2. Form 9 Cross Claim

The forms are available from:
www.lawlink.nsw.gov.au/lawlink/spu/ll_ucpr.nsf/pages/ucpr_forms

Northern Territory

To file a defence and/or counter claim you need to complete:
  1. Form 8A”Notice of Appearance” which must be filed within 7 days after service of the originating process when it is served within 200km of Darwin or Alice Springs. If an originating process is served elsewhere in the Commonwealth, an appearance must be filed no less than 14 days after service.

The form should be filed at the Registry of the Supreme Court at Darwin or at Alice Springs (depending on where the summons is issued.) Once the form is filed you will be expected to be at Court on the day listed in the summons.

To file your defence and/or cross claim you need to complete:
  1. Form 46A Summons
  2. Affidavit (setting out your defence)

Forms are available from:
www.supremecourt.nt.gov.au/going2court/civil.htm

Tasmania

If you decide to defend an application for possession you need to:
  1. Complete and file an affidavit/s that sets out all the facts upon which you intend to rely to dispute an order that you give up possession of the property. There is no specific form for the affidavit. However, there are general rules found in the Supreme Court Rules 2000 (rules 501-513) that are applicable to affidavits.

    In summary, the first page of the affidavit should, as for all Court documents, have a title, heading (of the type numbered 3 citing “In the Matter of the Land Titles Act 1980 s 146”) and footer as indicated in form 1 of the Supreme Court Forms Rules 2000. Below the required title and heading of the cause the document should state in bold capitals: “AFFIDAVIT”.

    The first sentence of the affidavit should be: “I, [insert name of person making the affidavit] of [insert address and profession of the person making the affidavit], make oath and say as follows:” The information provided in the affidavit should then follow and should be divided into numbered paragraphs. The first paragraph should be: “1. I make this Affidavit in response to the Summons to Show Cause issued on [date listed on the Summons]” . The affidavit should conclude with the words:

“SWORN by the abovenamed

Deponent at [                                                             ] in Tasmania
[insert signature of deponent]

this                                                            
[insert date e.g. 10th day of May, 1973]

BEFORE ME                                                            
[insert signature of witnessing Justice of the Peace]

A Justice of the Peace”

  1. Serve a sealed copy of the affidavit on the mortgagee (applicant) whose address for service will appear at the foot of the first page of the Summons to Show Cause received by you.
  2. Attend at the Court on the day and at the time shown on the Summons to Show Cause received by you.

Forms can be found at: www.supremecourt.tas.gov.au/practice_and_procedure/forms

ACT

To file a defence and/or cross claim you need to complete:
  1. Form 2.9 Defence and counterclaim which must be filed not later than 28 days after the day the originating claim is served on the defendant.
  2. Form 6.11 Affidavit in support.

Forms are available from:

  1. www.legislation.act.gov.au/af/2006-254/default.asp
  2. www.legislation.act.gov.au/af/2007-72/default.asp

Victoria (Supreme Court of Victoria and the County Court)

  1. Defence
There is no prescribed form. Use the originating motion in the forms section as a template. You have 10 days to file an appearance where the originating process is served in Victoria. You have until 30 days after filing an appearance to serve a defence.

The forms are available from:
www.magistratescourt.vic.gov.au/wps/wcm/connect/justlib/Magistrates+Court/Find/Forms/MAGISTRATES+-+Commencing+and+defending+civil+proceedings+-+forms

Western Australia

There is no prescribed form for a defence. To lodge a defence you should use the following forms:
  1. Form 6—Memorandum of Appearance
  2. Affidavit outlining your defence

Form 6 is available on the internet at:
www.supremecourt.wa.gov.au/content/procedure/general/forms.aspx

A sample copy of an Affidavit is available in Section 1.2 Registry Documents of the Consolidated Practice Directions, which are available on the internet at:
www.supremecourt.wa.gov.au/publications/pdf/SCPracticeDirections.pdf

Three copies of your defence documents need to be filed with the Supreme Court Registry. You need to sign the originals and have two photocopies of those documents. The Registry will stamp (Seal) each document, keep the original and give one copy for your records and one to be served on the plaintiff. Your defence needs to be served on the plaintiff within 14 days after the Statement of Claim was served on you. Service is effected by pre-paid post or personal delivery to the address of the legal representative on the front of the Statement of Claim.
www.supremecourt.wa.gov.au/content/procedure/practicedirections.aspx

Queensland

To defend a claim you need to complete two separate forms — which are filed as one document:
  1. UCPR Form 6 Notice of Intention to Defend
  2. UCPR Form 17 Defence

The Notice of Intention to Defend must have the defendants’s defence attached to it. A sealed copy of the Notice of Intention to Defend must be served at the plaintiff’s address for service. In a proceeding started by claim, a notice of Intention to Defend must be filed within 28 days after the claim was served. There is no requirement to file an affidavit in support.

To file a defence with a counterclaim:
  1. UCPR Form 18

Forms are available from:
www.courts.qld.gov.au/about/forms

South Australia

  1. Form 4 Defence which must be filed within 28 days after the Statement of Claim is served on the defendant.

The form is available from:
www.courts.sa.gov.au/index.html

Getting a stay of an eviction from Court

Sample affidavit for getting a stay of eviction

Delete the parts that do not apply to your situation.

Affidavit Details
Name [the person making the affidavit]
Address [this can be a work or home address]
Occupation [the person’s usual occupation, whether they
are employed in it at the time or not]
Date [the date the affidavit is signed]

I # say on oath/ # affirm: [the deponent chooses whether to swear or affirm]

  1. I am the defendant [or ‘first defendant’, or ‘the second defendant’, or whatever is appropriate.]
  2. I believe that the information contained in this affidavit is true.
  3. On [insert date] I received a Notice to Vacate from the NSW Sherriff in relation to my residential home [if you have a copy insert I attach a copy of the Notice to this affidavit and mark it Annexure A].
  4. I have never received a Notice to Vacate before [remove if not correct]

SET OUT THE GROUNDS FOR THE STAY WHICH MAY INCLUDE
[delete where not applicable].

Hardship in relation to moving from the property [include if you need more time because you can’t move, you can also name this as an alternative.]

  1. I live in the home with [insert] my children [insert ages, and number], my wife/husband.
  2. I am not able to find alternative rental accommodation [insert detail of your attempt to do so].
  3. I will not have anywhere to go as I have [no family],[no where to go].
  4. [insert any special circumstances that preclude you from moving or attempts you have or will make and how long it will take].

Refinance [if you need more time to refinance, include the following type of information]

  1. I have received a loan approval from [name of bank, credit union or building society]. Annexed and marked “A”.
  2. The amount of credit which has been approved being [amount of credit approved] is sufficient to cover the amount owed to the Plaintiff’s.
  3. The refinance is now only conditional upon [set out the reason why the refinance is been done]. Annexed and marked “B”.
  4. As such, if I was given [insert time] I will be able to refinance.

Sale of property

  1. I seek time to sell the property known as [address of your property] (“the Home”) myself.
  2. I have placed the home on the market. I attach a copy of the sales Real Estate Agency Agreement. Annexed and marked “A”.
  3. I have been to a conveyancing solicitor. Contracts for the sale of the property have been drafted. Annexed and marked “B”.
  4. I believe that I will exchange contracts for the sale of the Home within the next [time you estimate for the exchange to take place]. If I am able to sell the property I can discharge the whole of the debt under the mortgage.
Defence
  1. I think I may have a defence, and I am seeking legal advice. I have an appointment with [legal aid] [a private solicitor] about this matter on [insert date]

Forms available to use can be found at:

South Australia
To get a stay you need to complete:
  1. Form 7 Notice of Address for Service
  2. Form 14 Affidavit

Both forms can be found at:
www.courts.sa.gov.au/lawyers/practice_directions/2006-SC-pd/SC-PDs-forms-am19.pdf

Queensland
To get a stay you need to complete:
  1. UCPR Form 9 Interlocutory Application
  2. UCPR Form 46 Affidavit in support

Both forms can be found at:
www.courts.qld.gov.au/107.htm

Victoria (Supreme Court of Victoria)
To get a stay you need to complete:
  1. Form 46A Summons
  2. Affidavit in support
These forms can be found below:

Form 46A:
www.supremecourt.vic.gov.au

Affidavit template: www.supremecourt.vic.gov.au/wps/wcm/connect/justlib/supreme+court/
home/unrepresented+litigants/supreme+-+affidavit+template+%28form%29

New South Wales

To get a stay you need to complete:

  1. Form 20 Notice of Motion
  2. Form 40 Affidavit in support

Both forms can be found at:
www.lawlink.nsw.gov.au/lawlink/spu/ll_ucpr.nsf/pages/ucpr_forms

ACT
To get a stay you need to complete:
  1. Form 6.2 Application in Proceeding
  2. Affidavit in support

Both forms can be found at:

  1. www.legislation.act.gov.au/af/2010-103/default.asp
  2. www.legislation.act.gov.au/af/2007-72/default.asp
Northern Territory
To get a stay you need to complete:
  1. Form 46A Summons

Form can be found at:
www.supremecourt.nt.gov.au/going2court/civil.htm

Tasmania
To get a stay you need to complete:
  1. Form 41 interlocutory application

Form can be found at:
www.supremecourt.tas.gov.au/practice_and_procedure/forms

Western Australia
To get a Suspension Order you need to complete
  1. Form 9 “Application for a Suspension Order”
  2. Affidavit in support

Form 9 is available on the website for the Supreme Court of Western Australia at:
www.supremecourt.wa.gov.au/content/procedure/general/forms.aspx

A sample copy of an Affidavit is available in Section 1.2 Registry Documents of the Consolidated Practice Directions, which are available on the internet at:
www.supremecourt.wa.gov.au/publications/pdf/SCPracticeDirections.pdf

Industry Codes of Practice

Relevant financial hardship provisions of Industry Codes of Practice

Section 65 – 71 of the MFAA Code of Practice

MFAA Code of Practice

This Part applies to Members which are Credit Providers. Clauses 65 and 70 and 71 apply to Members which are not Credit Providers. This Part only applies in relation to a borrower who is a natural person (ie. an individual) or a small business as defined by Part 7.1 of the Corporations Act 2001.

  1. If the Member becomes aware, or is advised by the borrower, that the borrower is or may be in financial difficulties, the Member will consider in good faith whether it is reasonably appropriate to vary the payment terms of the credit facility, and if it is appropriate, suggest that the borrower requests the Credit Provider to vary the borrower’s repayment terms.
  2. In complying with clause 65, the Member must:
    1. have regard to the borrower’s financial circumstances and consider in good faith and within a reasonable time the borrower’s request to vary the payment terms;
    2. suspend any action to recover any payments due under the credit facility and, if it has not listed a default already, not list a credit default in respect of the credit facility against the borrower until:
      1. the Member informs the borrower in writing whether or not it will vary the payment terms; and
      2. if the Member and the borrower agree to vary the payment terms, the borrower fails to meet the varied payment term
    3. encourage the borrower to make payments the borrower can afford pending the Member informing the borrower of its decision.
  3. The Member must act reasonably in assessing the borrower’s request to vary the payment terms under the borrower’s credit facility. Amongst other things, the Member must not require:
    1. the borrower to apply for the early release of any part of his or her superannuation entitlements; or
    2. the borrower to obtain funds from family members, friends or other third parties, prior to the Member considering whether to, or agreeing to, vary the payment terms.
  4. If the Member decides to vary the payment terms, it must promptly give to the borrower a written notice setting out particulars of the varied payment terms.
  5. If the Member decides not to vary the payment terms, it must promptly inform the borrower in writing of:
    1. its decision and the reasons for its decision; and
    2. the borrower’s right to make a complaint to COS Limited or other ASIC-approved EDR scheme and the contact particulars of COS Limited or other ASIC-approved EDR scheme if the loan falls within the jurisdiction of those schemes.
  6. If a borrower informs a Member, who is not a Credit Provider nor a Mortgage Manager, thatthe borrower is in financial difficulty which prevents the borrower from repaying the credit facility in accordance with its terms, the Member must refer the borrower to the borrower’s Credit Provider or the person responsible for the credit and management decisions of the Credit Provider.
  7. If the Member is a Mortgage Manager, the Member must assist the borrower by requesting the Credit Provider or the person responsible for the credit and management decisions of the Credit Provider (whether or not the Member supports the request) to vary the payment terms of the borrower’s credit facility. If the borrower’s request is denied by the Credit Provider or the person responsible for the credit and management decisions of the Credit Provider and the borrower asks for the decision maker’s contact details, then the Mortgage Manager must give these to the borrower.
  8. In addition to any other rights under clauses 65 to 71 inclusive, if the borrower’s credit facility is regulated by the Uniform Consumer Credit Code and the borrower makes a request to a Member under section 66 of that Code, the Member must inform the borrower of his or her right to apply to COS Limited or other ASIC-approved EDR scheme or to a Court or tribunal to review the Member’s decision in respect of a hardship application.

Section 24 of the Mutual Banking Code of Practice

(24)
If you are in financial difficulties
(24.1)
We will work with you in a constructive way if you experience genuine difficulties meeting your financial commitments to us. With your agreement and commitment, we will try to assist you to overcome those difficulties. We will do this whether or not you have a right to seek a hardship variation or change under consumer credit laws.
(24.2)
Without limiting (24.1), we will have procedures in place to ensure we:
  • adhere to hardship variation or change provisions of consumer credit laws
  • respond promptly to any request or application made to us (we may also initiate contact
  • to discuss your financial situation)
  • genuinely consider your application or request, taking account of your situation. However, we will only be able to do this if you provide us with the financial information and documents we may reasonably need to assess your situation for ourselves
  • encourage you to keep making whatever payments you can while we are considering your request
  • consider longer term as well as short-term financial issues when they are relevant. If you are experiencing longer term difficulties, we will try to develop an appropriate solution with you to allow you to meet your obligations
  • not list your default on your credit reference file while we are considering your application or request
  • when you have made an application or request in respect of a debt, not sell that debt to a debt buy-out business while we are still considering the application or request
  • suggest other options or avenues that may be available to you, if we are unable to agree to your application or request
  • if we agree on a plan to assist you, summarise this in a letter to you
  • if we are unable to assist you, advise you promptly in writing, and
  • refer you to a financial counselling or similar service in appropriate cases (subject to availability).

Code of Banking Practice

(25.2)
With your agreement, we will try to help you overcome your financial difficulties with any credit facility you have with us. We could, for example, work with you to develop a repayment plan. If, at the time, the hardship variation provisions of the Uniform Consumer Credit Code could apply to your circumstances, we will inform you about them.