Consumer Credit Legislation Amendment (Enhancements) Act 2012 (130 of 2012)

Schedule 1   Enhancements

Part 1   Protection of debtor in cases of hardship

National Consumer Credit Protection Act 2009

1   Section 72 of the National Credit Code

Repeal the section, substitute:

72 Changes on grounds of hardship

Hardship notice

(1) If a debtor considers that he or she is or will be unable to meet his or her obligations under a credit contract, the debtor may give the credit provider notice (a hardship notice ), orally or in writing, of the debtor's inability to meet the obligations.

Note: If the debtor gives the credit provider a hardship notice, there may be requirements (beyond those in section 88) that the credit provider must comply with before beginning enforcement proceedings - see section 89A.

Further information

(2) Within 21 days after the day of receiving the debtor's hardship notice, the credit provider may give the debtor notice, orally or in writing, requiring the debtor to give the credit provider specified information within 21 days of the date of the notice stated in the notice. The information specified must be relevant to deciding:

(a) whether the debtor is or will be unable to meet the debtor's obligations under the contract; or

(b) how to change the contract if the debtor is or will be unable to meet those obligations.

(3) The debtor must comply with the requirement.

Note: The credit provider need not agree to change the credit contract, especially if the credit provider:

(a) does not believe there is a reasonable cause (such as illness or unemployment) for the debtor's inability to meet his or her obligations; or

(b) reasonably believes the debtor would not be able to meet his or her obligations under the contract even if it were changed.

Notice of decision on changing credit contract

(4) The credit provider must, before the end of the period identified under subsection (5), give the debtor a notice:

(a) that is in the form (if any) prescribed by the regulations and records the fact that the credit provider and the debtor have agreed to change the credit contract; or

(b) that is in the form (if any) prescribed by the regulations and states:

(i) the credit provider and the debtor have not agreed to change the credit contract; and

(ii) the reasons why they have not agreed; and

(iii) the name and contact details of the approved external dispute resolution scheme of which the credit provider is a member; and

(iv) the debtor's rights under that scheme.

Civil penalty: 2,000 penalty units.

(5) The credit provider must give the notice before the end of the period identified using the table.

Regulations may prescribe shorter periods for credit contracts

(6) The regulations may provide for subsections (2), (3), (4) and (5) to have effect in relation to credit contracts prescribed by the regulations as if a particular reference in subsection (2) or (5) to a number of days were a reference to a lesser number of days prescribed by the regulations.