What is financial difficulty?
Financial difficulty occurs when you find yourself in a situation where you are unable, reasonably, because of illness, unemployment, separation, reduction in household income or any other reasonable cause, to be meet the repayment terms of the credit contract and other financial obligations.
Financial hardship can be both long term or temporary depending on your individual circumstances and could arise as a result of:
- Illness or injury
- Unemployment or a reduction in income and/or overtime allowance
- Death to co-borrower or death in the family
- Business breakdown
- Workers' Compensation
- Relationship separation
If you think you may be experiencing financial difficulty, visit HSBC's Financial Difficulty page for more information.
What assistance can be provided?
Hardship assistance or hardship arrangements offered by HSBC can vary depending on a number of factors, including:
- Your individual circumstances, needs and financial situation at the time the unforseen change in personal or financial circumstances took place;
- The type of credit facility you have with us (for example, secured or unsecured loan);
- Whether the period of change to your personal or financial circumstances is known;
- The commercial position of the bank, such as ensuring consistency of hardship, collections, credit risk, and compliance policies and rules as well as reputational and other impacts.
While the suitability of options will be assessed on a case-by-case basis, some of the kinds of assistance that may be available include:
- In relation to mortgages, arrears capitalisation or postponement of payments for an agreed period of time;
- extending the period of the contract and reducing the amount of each payment due under the contract;
- reducing the limit available to customers on credit contracts;
- short-term reductions in interest rates, or repayments due under the contract;
- offering different financial arrangements that will better suit your needs;
- temporary overdrafts on a one-off and temporary basis to suit short-term needs;
- providing interest-only repayment options on loans; and
- providing fee waivers
These options will be made available in circumstances where you will be able to meet the new repayment terms and you will be able to meet contractual obligations in the long-run.
Customers with a mortgaged property may also be eligible to apply for additional short term assistance under the government mortgage assistance scheme. Should you require further information regarding the mortgage assistance scheme you can visit www.housing.nsw.gov.au
There is also some useful information about financial hardship and money management, including links to the ABA's DoingItTough website, the Financial Counselling Australia (FCA) website and the Australian Securities and Investments Commission (ASIC) MoneySmart website.
Finally, you may wish to speak with an accredited financial counselor. In Australia, there are many free financial counselling services and you can find out more about these by calling 1800 007 007.
How do I apply for financial hardship assistance?
HSBC has a number of ways you can discuss and apply for Financial Hardship assistance visit HSBC's Financial Difficulty page for more information.
What is the application process?
Once a customer has notified HSBC that they may be experiencing financial difficulty, depending on your individual circumstances, we may ask you to provide more information. This information will allow the bank us to better understand your financial position, determine whether assistance will be appropriate and will allow you to explain how your circumstances have changed and how you expect them to improve in the future.
The type of information and documentation required may be dependent on a number of factors including the period of time where hardship assistance is required, the type of arrangement that may be offered to the, or whether a third party requires additional information.
Information and documentation that may be required include:
- Statement of Financial Position - outlining income and expenditure, assets and liabilities, living expenses, etc.
- Employment contract and/or payslips
- Account statements
- Centrelink statement and/or social security payment
- Medical certificate from a qualified medical practitioner
- Separation statement
- Contract of sale
- Consent from joint borrower (where required).
If adequate information is held about your current financial position then the next step is for the Bank to make an assessment as to any proposal it can make to achieve repayment of the debt on reasonable terms.
We will not ask you for supporting evidence that is unreasonably onerous or unnecessary such as detailed medical records unless we considering approving long term assistance or total debt waiver.
Visit HSBC's Financial Difficulty page for more information if you would like to apply.
When will I receive a response from HSBC?
HSBC will respond promptly to your request, in writing, confirming the main details of any arrangement made. We aim to provide you with an outcome for your application or with within 21 days of your request. Within 21 days from the date of your request, we will also advise you of our decision in writing or we will write to you and ask you for further information to help us come to a decision.
We will hold our collections activity during the assessment process and we will not commence further action to enforce or recover your debt nor will we consider outsourcing your debt to a Debt Collection Agency until we have completed our assessment and advised you of the outcome.
What happens if HSBC does not agree to provide assistance?
HSBC will give genuine consideration of any request, irrespective of your loan value, reason for financial difficulty or your repayment history.
If you are declined, either because we did not receive a response from you or for some other reason, you are required to adhere to the terms of the HSBC credit contract and make the repayments to us as and when they fall due.
We value our customers and are committed to dealing with all financial difficulty applications in a fair and equitable manner. If you feel that your situation has not been adequately addressed by us, you can ask us to reconsider.
In the event HSBC is unable to approve your hardship request we will provide you with information about your right to refer your request to our Customer Relations Team to make a complaint.
Alternatively, if we still refuse, or if we do not respond to your request within 21 days, you can go to the Australian Financial Complaints Authority by telephoning them on 1800 931 678, writing to them at GPO Box 3 Melbourne VIC 3001 or lodge your complaint online at www.afca.org.au.