In July 2010, the federal government passed a new law designed to help people who are going through tough times. Under Section 72-75 of the National Credit Code, an individual who is struggling to make ends meet due to a change in their personal situation can re-negotiate their mortgage and credit payments with their bank.
On grounds of financial hardship, this law protects the debtor from getting sued or incurring penalties for breach of their credit contract.
While everyone knows what can cause financial hardship (things such as job loss, illness, natural disasters), the details behind this important reform are little understood. At the very least, it means that since 2010 banks are required by law not to list the matter on the debtor’s credit report. This is important because it would have otherwise made it harder to borrow money in the future. The law also prevents banks from charging additional default fees and default interest payments as long as the debtor complies with the new and temporary arrangement.
This story is from the February 2020 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the February 2020 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.