what to do if you have debts

repossession
legal action
impact on other people
impact on you

If you have debts and loans, your decisions about managing your financial problems will largely depend on your resources and the priorities you have set yourself. For example, if you are struggling to meet your essential living costs, then you will probably have a fairly limited ability to meet demands from creditors. However, if you are concerned to protect property or someone who has given a guarantee over your loan, you may place a priority on finding a way to meet loan repayments. Your options may also be helped or hindered by the attitude of creditors and their willingness to negotiate.

If you are having problems meeting repayments on a consumer loan, you have a legal right to request that your payments be varied to a reasonable amount. What is reasonable depends on factors such as the terms of the loan and your circumstances. A creditor that refuses to meet a reasonable request to vary commitments under a loan can have that decision overturned by the Victorian Civil and Administrative Tribunal (VCAT). Get advice if you think you could meet your loan commitments if your payments were varied.

In reaching a decision about what to do to manage your financial problems, it is important to understand what your creditors can do to attempt to recover money owed and to know what your rights are should this happen.

repossession

Creditors who have a loan secured to goods (known as a mortgage or secured loan) may seize those goods if you have breached an obligation under the contract, such as not paying the instalments. With consumer loans, the creditor must give you notice before it can seize the goods. This notice is intended to give you limited time to fix the problem. Once the goods are seized, you must also get notice saying, amongst other things, when the goods will be sold, in order to give you further limited time to fix the problem. If the sale price of the goods is not enough to cover the loan, the creditor will still be able to pursue you for the money still owing.

If you have a secured loan and are experiencing financial problems, you may have a right to vary the payments under the loan contract. It is important to get advice as quickly as possible.