Where to get free help with credit and debt
Moneysmart’s advice for anyone in crisis or unable to pay bills is to start with financial counselling: the National Debt Helpline connects callers with a counsellor, and the service is free, confidential and not means-tested. For a dispute a lender has not resolved, the Australian Financial Complaints Authority (AFCA) offers free dispute resolution, and for a default notice or legal action the sources point to free legal advice straight away.
General information, not financial or legal advice. The official places to check are the National Debt Helpline, Moneysmart and AFCA.
AWhat has gone wrong, and who the sources point to
| Problem | Help the sources name |
|---|---|
| Repayments have become hard | Your lender’s hardship team first; your lender must consider you for hardship assistance when you ask. A financial counsellor can help you apply. |
| The lender refused, or has not answered | The lender must give a reason for refusing; if you are not happy, its internal dispute resolution team, then AFCA, including when you hear nothing at all. |
| Something on your credit report is wrong | The credit reporting agency or the lender, who are both required to help, at no cost to you; AFCA if you cannot reach agreement. |
| A default notice or court papers have arrived | Don’t ignore a default notice: talk to the lender or get free legal advice immediately. For court notices or demands about a debt, the National Debt Helpline says to get legal advice immediately. |
| A payday lender charged more than the cap | Free legal advice on getting the money back. |
| You need help with the complaint process itself | Possibly free legal advice from a community legal centre. |
BFinancial counsellors
The National Debt Helpline describes financial counsellors as skilled professionals who give practical advice and support to people in financial difficulty or with problems with debt, in a service that is free, confidential and independent. Access is not means-tested, and it runs through community organisations across Australia.
What a counsellor can do is concrete: help you explore your options, negotiate with your creditors, and put plans in place to manage your debts. The Helpline says counsellors know the laws on credit, debt collection and bankruptcy, how social security and hardship rules work, and the way into free dispute resolution. It also says they are not judgmental about anyone’s circumstances.
The Helpline’s number is 1800 007 007; it takes calls on weekdays between 9:30 am and 4:30 pm, with live chat from 9:00 am to 8:00 pm on weekdays.
Two limits are worth knowing. Moneysmart says counsellors help with budgeting, negotiating with creditors and finding emergency support but do not give personal product advice, and that they do not give legal advice either: if you face legal action, it says to get free legal advice straight away.
The word “free” is a test as well as a promise. Moneysmart says financial counselling is free and you never need to pay, and that businesses charging fees for it are debt consolidation and refinancing companies, not financial counsellors. Signs of a predatory lender covers paid credit repair and debt firms.
CThe Australian Financial Complaints Authority
AFCA’s page says it helps people in hardship settle disagreements with banks, mortgage providers and other financial firms. Its own page says that if you are unhappy with your financial firm’s response, or hear nothing at all, you can complain to AFCA, and its number is 1800 931 678.
For a financial hardship complaint, AFCA’s page describes these steps:
- The statementAFCA asks you to complete a statement of financial position, setting out your situation and how you plan to repay the debt.
- The firm is toldAFCA sends the details to your financial firm and encourages it to contact you quickly; if no agreement is reached, a case worker from its financial hardship team investigates.
- ConciliationThe case manager may arrange a conciliation conference, a discussion AFCA leads between you and the firm.
- A decisionIf that does not resolve it, or a conference is not right for the complaint, AFCA can make a final decision.
The National Debt Helpline adds what happens around that process. All enforcement action stops while an external dispute resolution scheme considers your dispute, and you can lodge even while being sued, as long as judgment has not been given. The decision binds your creditor if you accept it, and if you do not, you can still go to court, subject to any time limits.
One timing point from ASIC: a firm must answer a complaint itself no later than 30 calendar days after receiving it, with a shorter limit where a credit complaint involves a default notice or a hardship notice or request to postpone enforcement proceedings (for these, with exceptions where the provider lacks the information to decide or reaches an agreement), and for a complaint involving a default notice, ASIC expects the person to have at least 14 calendar days after that answer to lodge with AFCA.
DFree legal advice
Moneysmart says a community legal centre may give free legal advice to someone who needs help with the complaint process. For Aboriginal and Torres Strait Islander peoples, it names Mob Strong Debt Help, a free legal advice service about money matters, available from anywhere in Australia; its details are on Moneysmart’s financial counselling page.
The National Debt Helpline is direct about court: if you are getting court notices or demands about a debt, get legal advice immediately, and a dispute must be lodged with external dispute resolution before the lender gets court judgment.