A decision on the merits - Mortgage stress
What is looked at in making a Determination?
The Determination will:
- be made by an AFCA ombudsman or their delegate
- take into account all the information previously provided by the parties to AFCA, and
- be based on what is considered as fair in all the circumstances, taking into account the law, any relevant codes of practice, as well as good industry practice.
In making a Determination about hardship variations, the following things will be considered:
- Are you in hardship because of unemployment, illness or other reasonable cause?
- Have you shown that you now cannot meet your regular repayments as a result of hardship?
- Are you likely to be able to meet the new repayment arrangement you requested?
- Will you get back on track and pay out the whole loan within a reasonable time?
- What help has the lender offered you?
What happens after the Determination?
If you reached an agreement with the lender or accepted a Determination, you should start repaying your loan in accordance with the agreement or Determination.
If you are unable to get a hardship variation from the lender and through AFCA's dispute resolution process, and are still having trouble making repayments, you may need to consider some other ways to help pay off your mortgage, such as:
- selling your home, or
- accessing your superannuation.
You should get financial advice about these options, and any other options you might have.
If you have received a Writ of Summons from the lender, you need to get urgent legal advice.
What about going to court?
If you are unsuccessful at AFCA, you may be able to apply to the Federal Magistrates Court for a court ordered variation to the credit contract under the National Credit Code.
Get legal advice if you are considering this option. It may be a costly process. If a judgment has already been entered against you, the court has the power to suspend any enforcement proceedings under the credit contract until the application has been dealt with by the court, if it thinks it is appropriate in the circumstances.