Fill in the [brackets]
Subject: Financial hardship application - mortgage [account number]
Dear [Bank] Financial Hardship Team, I am writing to apply for assistance under the hardship provisions of the Credit Contracts and Consumer Finance Act 2003 and your hardship policy. Account: [mortgage account number / address of property] Name: [full name] Why I am applying My employment ended on [date] due to redundancy. My household income has fallen from $[amount] to [$amount / no income] a [week/fortnight]. [Optional: I have applied for Work and Income support and I am actively looking for work.] What I am asking for [Choose one or more:] - A repayment holiday / deferral of [X] months, starting [date]. - Reduced repayments of $[amount] for [X] months. - Interest-only payments for [X] months. - Extending the term of the loan. - Capitalising arrears. Please also confirm that no default interest or fees will be added during the arrangement and that no enforcement action will be taken while my application is considered. My situation Income (weekly): $[amount] from [source] Essential costs (weekly): $[amount] (rent/mortgage, food, power, insurance, transport, etc.) Savings: $[amount] Other debts: [list] I have attached [a statement of income and expenses / my redundancy letter / bank statements]. When I expect my situation to improve [e.g. I am applying for work in [industry] and expect to start by [month]. / I have savings to cover [X] weeks.] Please acknowledge receipt of this application in writing and let me know whom I should contact. If you need more information, call me on [phone] or email me. Kind regards, [Your name] [Address, phone]
Tips
- Lenders must consider a hardship application and respond in writing with a decision and, if refused, reasons. Under the Credit Contracts and Consumer Finance Act the lender must acknowledge your application in writing within 5 working days and generally decide within 20 working days (longer if they ask for more information). You cannot apply if, for example, you have been in default for two months or more, so apply early. Check the current rules at fma.govt.nz or ask MoneyTalks (0800 345 123).
- Send it by email or secure message AND keep proof. Say 'hardship application' explicitly.
- Call first as well (see the bank call script), then follow up in writing.
- A hardship arrangement may be recorded on your credit file, but defaulting is usually worse. Ask how it will be reported.
- If the bank declines or is unhelpful, free dispute resolution schemes (e.g. Financial Services Complaints Ltd, the Banking Ombudsman) can review it.
- MoneyTalks and a budgeting service can help you prepare a budget for the bank at no cost.
- Check whether you can claim the Accommodation Supplement or other help from Work and Income at the same time.
General information, not legal advice. Keep a copy of everything you send. Spotted something out of date? Email help@unemployed.nz.