How to Apply for a Hardship Arrangement (Step by Step)

If you're struggling to pay a bill or loan, a hardship arrangement can give you breathing room. This guide walks you through exactly what to do — from your first phone call to getting it in writing.

A hardship arrangement is a formal agreement between you and a creditor — that's a bank, lender, utility company, or insurer — to temporarily change your repayment terms. It might mean pausing your repayments, reducing the amount you pay each fortnight, or extending your loan term so each payment is smaller. It's a legal right, not a favour.

Australian law requires banks, energy retailers, telcos, and insurers to have hardship programs in place. You don't need to be weeks behind on payments to qualify. In fact, the earlier you ask, the better your options tend to be.

1. Gather your documents before you call

   Having the right information in front of you makes the call much smoother. You won't need everything on this list, but pulling together what you can will help you explain your situation clearly and show you're serious about sorting it out.

   Useful things to have ready:

   • Recent payslips or bank statements (to show your current income)
   • Any Centrelink letters if you're receiving government payments
   • Your most recent bills or statements for the account you're calling about
   • A rough idea of your monthly income and essential expenses — rent, groceries, transport
   • A brief note on what changed — job loss, illness, separation — and when it happened

   You don't need to have a polished budget spreadsheet. A rough idea of what's coming in and going out is enough to start the conversation.

2. Contact the hardship team directly — not general customer service

   Most large creditors have a dedicated hardship team separate from their general call centre. General customer service reps often don't have the authority to offer hardship arrangements, so it pays to ask for the right department from the start.

   To find the right number, search the company's website for "hardship" or "financial hardship assistance". You can also check the back of your bill or statement — hardship contact details are often listed there. If you can't find a specific number, call the main number and say: "I'd like to speak to someone in the financial hardship team, please."

   For energy retailers specifically

   Energy companies in Australia are required to have a hardship program. Look for a section called "Payment difficulty" or "Hardship program" on their website. If your retailer isn't helping, your state or territory's energy ombudsman can step in.

3. Explain your situation clearly on the call

   You don't need to tell your whole life story. Keep it simple and stick to the facts. A good opening sounds something like this:

   "I'm calling because I'm experiencing financial hardship due to [job loss / a health issue / a relationship breakdown]. I'm finding it difficult to keep up with my repayments right now, and I'd like to talk about my options."

   Then say what you can afford. For example: "I can afford to pay around $X a fortnight for the next three months while I get back on my feet." Being specific about what you can manage shows good faith and gives the hardship team something to work with.

   You don't need to prove anything at this stage. You'll likely be asked a few questions about your situation, and the team may ask you to submit some documents afterwards — that's normal.

4. Get the arrangement in writing

   Once you've agreed on something, ask for written confirmation. You can say: "Can you please send me an email or letter confirming the terms we've just agreed to?"

   Make sure the written confirmation includes the specific arrangement — what your new payment amount is, how long it lasts, and whether interest or fees are paused or reduced during that time. If you don't receive something in writing within a few days, follow up with a brief email to the hardship team summarising what was agreed.

   Having it in writing protects you. If there's ever a dispute about what was agreed, you've got a record.

5. Understand what happens while your application is being assessed

   From the moment you tell a creditor you're in financial hardship, they generally cannot take enforcement action against you while they're still assessing your application. That means they should not list a default on your credit file, take legal action, or send debt collectors to your door during this period.

   This protection isn't indefinite — it applies while your application is under genuine consideration. If you've submitted your information and are waiting to hear back, you have a reasonable expectation that your account won't be escalated in the meantime.

   Keep a record of everything

   Write down the date and time of every phone call, the name of who you spoke to, and a brief note of what was said. If things go wrong later, this record is valuable. Send a follow-up email after any important call to create a written trail.

6. If they say no — here's what to do next

   If the creditor declines your hardship application, you have the right to ask for an internal review. Say: "I'd like to formally request a review of this decision." This escalates your case to a more senior person within the organisation.

   If the internal review doesn't go your way, you can take your complaint to an external dispute resolution scheme — and it's free. For banks and lenders, that's AFCA (the Australian Financial Complaints Authority — the free, independent dispute resolution service for financial complaints). You can lodge a complaint at afca.org.au or call them on 1800 931 678.

   For energy retailers, contact your state or territory energy ombudsman. For telcos, the relevant body is the TIO (the Telecommunications Industry Ombudsman) at tio.com.au. These services are free to use and creditors take them seriously.

   Get a financial counsellor in your corner

   You don't have to do this alone. A free financial counsellor can help you prepare for the call, negotiate on your behalf, and escalate if needed. Call the National Debt Helpline on 1800 007 007 — it's free, confidential, and available Monday to Friday.

A quick recap

Applying for a hardship arrangement doesn't have to be overwhelming. The basic steps are: get your paperwork together, find the right team to call, explain your situation plainly, agree on what you can afford, and get it in writing. If they knock you back, escalate — you have clear rights and free support services available.

The most important thing is to act early. The sooner you reach out, the more options you'll have.