Facing financial hardship?

04/06/2016 11:33

Life is unpredictable. You never know what challenges are coming your way. Many who have a home loan or simply hire purchase payments to make and suddenly lose their jobs or livelihood, live on the edge of financial disaster.  Managing their debt and life becomes a battle.

Jesoni, who used to earn a living for himself and his family by diving, is now faced with a financial hardship and his daily life has become a struggle.

He has two hire purchase accounts with a credit-provider (Carpenters Finance). He has a balance of $1637.94 as per one account -  purchase of a LCD TV 32” and 7 piece dining table with an agreed monthly instalment of $74 (last payment made on 25 April 2016  was  $65. Arrears: $162); with his second account, he has $225.80 balance – purchase of a deep-freezer with an agreed monthly instalment of $72 (last payment made on 25 April 2016 - $65. Arrears: $168).

At the time Jesoni applied for hire purchase with Carpenters Finance, he was a self-employed diver and his main source of income was from selling his seafood catch to a seafood company. Apart from that Jesoni engages himself in subsistence farming to support his family’s financial needs and sold  yaqona from time to time to supplement his income.

 Unfortunately, Jesoni has now come down with what looks like a serious illness that has disabled him from engaging in diving - hence, halting his main source of income. He had collapsed in April and was rushed for urgent medical attention.

Jesoni was diagnosed with respiratory related problems and was given explicit instructions by the specialist not to dive for the next 3 months subject to further review of his condition and to refrain from engaging in any physical/ strenuous exercise and to have lots of rest. Jesoni also advised the Council that he was previously admitted at the CWM hospital for a case of the Bends (decompression sickness) a few years back, so he may very well be going through the repercussions of an occupational hazard.

Stuck in such a situation, Jesoni sought Council’s help in managing his credit.

On 27 April 2016, the Council requested the credit-provider for a restructure of both of his accounts under the grounds of hardship pursuant to Section 66 (2) (b) of the Consumer Credit Act 1999 and for Jesoni to be given a repayment holiday for a period of 3 months so he can get some good rest and reflect and re-strategize his next line of job.

Carpenters Finance wrote back to the Council on 3 May, granting the request for a repayment holiday of 3 months and agreed to also waiver his last monthly instalment payments that were due on 30 April, 2016.

Consumers facing some form of “hardship” may apply to their credit provider for a restructure of their credit contracts pursuant to section 66 (2) of the Consumer Credit Act 1999; and may request for the following:

(a) extend the period of the contract and reducing the amount of each payment due under the contract accordingly;

(b) postpone for a specified period the date on which any payment is due under the contract;

(c) extend the period of the contract and postponing for a specified period the date on which any payment is due under the contract.

Hardship is referred to in section 66 (1) (a) of the Consumer Credit Act 1999 as a debtor who is unable because of illness, unemployment or other reasonable cause, to meet the debtor's obligations under a credit contract.

However, consumers facing hardship should be prompt in acting on and not waiting until they have huge amount of arrears.

It pays to be vigilant and take a proactive approach when it comes to fixing your debt. Feel free to seek the assistance of the Consumer Council’s Debt Management and Consumer Credit Advisory Services which is free-of-charge.