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Managing debt
Last updated:  Feb 2023

The information set out on this page is intended as an introduction only and should not be relied on in place of legal advice. 

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I am having trouble paying my debts because I have been affected by a disaster. What should I do?

What to do first
Tell your creditor about your situation as soon as possible. A creditor is the person or organisation you owe money to. Ask the creditor to put a hold on your debts while you see a financial counsellor or get legal advice. You can try to change your repayment plans with the creditor by asking for more time to make payments or to pay back what you owe in instalments. Tell the creditor what you can afford to pay and how much time you think you need. A financial counsellor can help you with this. Financial counsellors provide free help for people with debt problems.

Hardship variations
If your debt is a credit card, personal loan or home loan (not a business loan) debt, you may also apply for a 'hardship variation' to change your contract with the creditor. A hardship variation can give you more time to pay (called 'extending the length of a loan'), reduce the amount you are paying with each payment or give you a break from paying anything for a period of time.

If your creditor does not agree to the variation, you may complain to an external dispute resolution scheme, the Australian Financial Complaints Authority. They will look into the details of your situation, talk with your creditor and try to work out an agreement between you and the creditor. Both ombudsman services cover business debts.

You can read more about hardship variations at the ASIC Money Smart website.

If you have a business debt, you can still try to change your repayment plan with your creditor. A financial counsellor may be able to guide you.

Financial counsellors
A financial counsellor can help you work out how to pay back your debt, write up your budget and communicate with creditors. They can also give you names and numbers of other services that may be helpful, such as for family support or for support with gambling or personal problems. Contact the National Debt Helpline.

What can the creditor do if I don’t pay the debt?

Going to court
Usually a lender can charge you a higher rate of interest once you are behind in your repayments, as well as legal and enforcement costs, and take you to court to sue you for the money you owe them.

If you get a letter of demand from a lender or are served with court documents  get legal help immediately. Contact Consumer Credit Law Centre.

You will only have a short time to act. If you do not put in a defence quickly a court order will be made requiring you to pay all the money you owe (not just the arrears), plus interest and court costs. If the debt is your home loan, it is likely a court will also order the repossession of your home.

You should apply for a hardship variation before a lender takes court action against you. If you have been served with court documents you may still apply for a hardship variation.  Once a court has made an order against you, it is too late to apply for hardship.

Credit reports
To find out if a court order has been made against you in the past, you can order a copy of your credit report, which will have this information. Your credit report also has information about your credit history, including requests for loans (as well as applications for mobile phones and utilities), late payments and unpaid debts. 

Do I have to make mortgage payments if my house was damaged or destroyed, or if my situation has changed because of a disaster?
You still need to pay your mortgage, but there are steps you can take to make this easier.

Contact your lender and try to arrange a change to, or the stopping of, your repayments for a period up to 12 months. A financial counsellor can help you with this. If your lender does not agree, you should apply for a hardship variation. Hardship variations do not apply to investment properties. Contact the Consumer Credit Law Centre for legal advice.

Can I access my superannuation to help pay my debts?

Checking to see if you are eligible
You may be able to get your superannuation early if it is used to stop your lender selling your property, for medical reasons (or paying expenses to do with the medical needs) or due to the death of someone dependent on you. There are other special circumstances. You will need to talk to your superannuation trustee.

Note: some people on certain Centrelink pensions can get their superannuation early. You need to contact Centrelink to see if you can do this. There are different numbers to call depending on what payment you are on.

Making the application
If you are eligible, you will need to apply to get your superannuation early through the Department of Human Services. There are different forms depending on your reason for wanting to get your superannuation early – make sure you use the right form. If your application is refused, contact a financial counsellor or get legal advice. 

How to apply depends on why you need the money.


Apply to the Department of Human Services if you have compassionate grounds. Apply straight to your superannuation fund for any other reason. In this case, ask your superannuation fund how to apply.

You usually pay high tax on your superannuation if you get it early, often between 20 and 25 per cent. Contact the Australian Taxation Office on 13 28 61 to find out how much tax you will have to pay.

What if I disagree with the amount I owe?
If you disagree with the amount of a debt owing under a loan you should apply to the relevant dispute resolution scheme. This should stop your creditor starting any legal action.

If the debt is a credit card, personal or home loan debt, the lender has a legal requirement to provide you with statements of account showing the amount owing.

If you dispute a debt with a utility company, you may complain to the Energy and Water Ombudsman. The Telecommunications Industry Ombudsman deals with complaints about disputed telephone debts

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