Hardship under CCCFA

Under the CCCFA the borrower has the right to ask the lender to vary the credit contract due to hardship. The criteria for asking for hardship are as follows:

• the borrower has suffered a hardship they could not have seen coming before entering the credit contract, such as illness or injury, loss of employment, the end of a relationship, or death of a partner or spouse
• as a result of that hardship, they now cannot meet their repayments
• they believe they would be able to meet their repayments if the contract were changed.

In addition, the borrower must NOT:

• be more than two months in arrears
• have missed more than four consecutive payments
• have been in default for two or more weeks after receiving a repossession notice.

However, if one of these situations applies you can make catch up payments and then make a hardship application at that time.

A borrower can ask the lender for:

• an extension of term and therefore lower monthly repayments
• a payment holiday, or
• a combination of the two.

The lender does not have to agree but must clearly state why.