Economic hardship is a term used in Australia to refer to a temporary modification of the terms of the loan agreement to help the financial problems they experience. Modifications may include a suspension of payments, suspension of interest, or a reduction in payment amounts. Although it is not fixed, it is common for agreements to be established for 3 months. Financial hardship is particularly useful for those who experience short-term financial problems (unemployment, illness, natural disasters). For the permanent modification of the terms of the loan debt agreement provides the only way to do this.

Financial difficulties before it was a state requirement on the basis of the lenders, but the introduction of the National Consumer Credit Protection Act (NCCP) in 2010 was assisted financially troubled clients with a requirement of lending in Australia. The NCCP provides specific requirements that lenders have to offer consumers.

Under the NCCP is an upper limit for the difficulties. On July 1, 2011, the figure is $ 500,000. For consumers who owe more than the difficulty number is not mandatory under legislation that does not mean however that the lender can not provide economic difficulties that happens is that, at its discretion.

The consumer to difficulty communicating with your lender. Specifically, it may have to ask the department challenges. The consumer must inform the lender that your circumstances have changed and can not pay because they are contractually obligated. The consumer should be as honest as possible to ensure that the lender all the necessary information to make a decision difficult. Once agreement is reached, the consumer must request that the agreement is confirmed in writing. The lender must approve your application instantly. Under the legislation has 21 days to respond to your request but if they reject your application must provide a justification. The rejected claims may be appealed through a conflict resolution scheme outside either the Financial Ombudsman Service or the Service Credit Ombudsman.

For consumers the main benefit of financial difficulties is to provide a period of time in which to handle the problems of finance without a flaw that could prevent the loan for 5 years. For the lender the benefit is getting to know about the financial difficulties of the client and assist them in managing the problem to a negotiated settlement rather than discovering that there was a problem after the loan has missed three months of payments.