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Credit law toolkit

Problem solving guides

The following is a list of questions you should consider in relation to every credit–related debt your client has, with a reference to the parts of this toolkit that may be helpful depending on the answer to the question.

Regulated credit

Has the debt arisen because of a regulated consumer credit contract?

See Credit Law overview

If the answer is no, then think about whether other laws or codes of practice may apply (these apply to regulated credit contracts also, but also have wider application to non regulated contracts):

  • ASIC Act including:
    • Unfair terms
    • Misleading and deceptive conduct
    • Unconscionable conduct
    • Harassment or coercion
  • Contracts Review Act (NSW) (For contracts entered in NSW only.)
  • Industry codes of practice

If the debt arises from a regulated credit contract – is the credit provider licensed?

See Credit Law overview

Was the client given a Credit Guide?

See Responsible lending conduct

Does the credit contract comply with the disclosure provisions?

See Disclosure

Was there a broker or other intermediary? Were they licensed? Did the broker give the client a Credit Guide and Quote?

See Finance brokers

Enforcement

Has a default notice been issued? When does it expire?

Does it contain everything the law says it should? Can the consumer pay the amount in default (plus usual repayment)? If yes, then the consumer has complied with the default notice. If no, consider:

  • Is there a dispute about the amount of the debt?
  • Formally request financial hardship and stay

See Financial hardship and How to Guides and Sample letters: Financial hardship

See Enforcement

After the default notice has expired and default not fixed (no legal action commenced yet):

Is legal action or repossession of secured property threatened? Ring credit provider and ask them not to proceed with any legal action, as you will be raising a dispute and/or financial hardship. If they agree, confirm this in writing. If they refuse, see below.

Request a hardship repayment arrangement and/or raise a dispute and lodge in EDR.

See External Dispute Resolution

See Enforcement

Have legal proceedings commenced?

(The consumer would usually have been served with an official court document, such as a Summons or Statement of Claim.)

  • Work out when the consumer was served with the court proceedings.
  • Find out how much time the consumer has to file a defence before the credit provider can obtain judgment.
  • Lodge in EDR well before the time (to file a defence) expires and ring EDR to make sure they have received the dispute/complaint. Make sure the credit provider agrees not to proceed to judgment.
  • If it is after the time allowed to file a defence, check with the court to see if there is a judgment. If there is no judgment can still lodge in EDR.
  • If judgment has been obtained then the consumer cannot lodge in FOS and can get limited assistance in CIO.

See External Dispute Resolution

Disputes

Is it the client’s debt (mistaken identity/fraud)? If not, raise a dispute with credit provider. If unresolved go to EDR.

See Debt collection

Is the debt statute barred? If yes, raise a dispute with credit provider. If unresolved go to EDR.

See Debt collection

Has there been a change of financial circumstances for the consumer? Do they qualify for hardship under the Credit Law or a Code of Practice?

See Financial hardship and How to Guides and Sample letters: Financial hardship

Was the consumer ever in a position to meet their obligations under the contract (Did they have the capacity to pay when the contract was made)?

See Responsible lending conduct, Unjustness, and How to Guides and Sample letters: Unsuitable lending

Is there something else unfair or unsuitable about the contract? Did it meet the consumer’s needs and requirements? Was it unjust?

See Responsible lending conduct, Unjustness, and How to Guides and Sample letters: Unsuitable lending

Has the amount claimed been calculated correctly?

If not, raise a dispute. If you cannot resolve the dispute, lodge a complaint in EDR.

See External Dispute Resolution

What about the fees and charges? Are they unconscionable? Unfair?

See Unjustness

Are there compassionate reasons for asking the credit provider to waive the debt?

See How to Guides and Sample letters: Requesting a release from a debt