Legal Aid Queensland is encouraging people to talk to their lenders and service providers if they are struggling to make ends meet, as increasing interest rates and cost of living pressures start to hit household budgets.
Consumer law expert Loretta Kreet said it was important for people to understand the options available to them if things are tight financially and to get help quickly.
"The first step is to talk to your lender about your mortgage and all of your other loans, credit cards and Buy Now Pay Later products, and talk about the options available in your particular case,” she said.
“The earlier you talk to your lender, the more assistance they are usually able to provide. You should also talk to your local council if you’re struggling with rates, your body corporate if fees are an issue, and your water and electricity providers to ask about their hardship policies, which can help you get your bills back on track.”
Ms Kreet said many people didn’t realise there were consumer protection laws that gave borrowers the right to access hardship provisions if they are struggling to repay their loans.
“Many lenders and service providers are legally required to offer help to people experiencing hardship, which means you can negotiate with your lender to increase the length of the loan or suspend or reduce your payments until you’re back on track financially,” she said.
“But it’s important to note that not all lenders or service providers are covered by these laws, so sometimes we see people who are able to negotiate a repayment plan for their mortgage, but their house ends up being sold due to unpaid body corporate fees or council rates.
“It can be really hard to talk to someone if you’re struggling financially. Asking for help is hard. But if your finances are really tight, we encourage you to talk to us so you understand the legal protections that are available to you.”
Legal Aid Queensland also has a free legal information guide “Are you struggling to pay a loan?”, available to read online, which explains your rights when negotiating with lenders and service providers if you’re struggling financially. You can also order a free hard copy of the guide at www.legalaid.qld.gov.au .
If you are struggling to pay a loan and need legal advice call Legal Aid Queensland on 1300 65 11 88 or visit www.legalaid.qld.gov.au.