National Consumer Credit Protection Act 2009

If a debtor considers that he or she is or will be unable to meet his or her obligations under a credit contract, the debtor may give the credit provider notice (a hardship notice), orally or in writing, of the debtor’s inability to meet the obligations.

If the debtor gives the credit provider a hardship notice, there may be requirements (beyond those in section 88) that the credit provider must comply with before beginning enforcement proceedings—see section 89A.

Within 21 days after the day of receiving the debtor’s hardship notice, the credit provider may give the debtor notice, orally or in writing, requiring the debtor to give the credit provider specified information within 21 days of the date of the notice stated in the notice. The information specified must be relevant to deciding:

whether the debtor is or will be unable to meet the debtor’s obligations under the contract; or

how to change the contract if the debtor is or will be unable to meet those obligations.

The debtor must comply with the requirement.

The credit provider need not agree to change the credit contract, especially if the credit provider:

does not believe there is a reasonable cause (such as family violence, illness or unemployment) for the debtor’s inability to meet his or her obligations; or

reasonably believes the debtor would not be able to meet his or her obligations under the contract even if it were changed.

The credit provider must, before the end of the period identified under subsection (5), give the debtor a notice:

that is in the form (if any) prescribed by the regulations and records the fact that the credit provider and the debtor have agreed to change the credit contract; or

that is in the form (if any) prescribed by the regulations and states:

the credit provider and the debtor have not agreed to change the credit contract; and

the reasons why they have not agreed; and

the name and contact details of the AFCA scheme; and

the debtor’s rights under that scheme.

Subsection (4) does not apply if the credit provider and the debtor agree to a change to the credit contract that defers or otherwise reduces the obligations of the debtor under that contract for a period not exceeding 90 days.

The credit provider must give the notice before the end of the period identified using the table.

The regulations may provide for subsections (2), (3), (4) and (5) to have effect in relation to credit contracts prescribed by the regulations as if a particular reference in subsection (2) or (5) to a number of days were a reference to a lesser number of days prescribed by the regulations.