Financial hardship arrangement
(a) a credit provider provides consumer credit to an individual; and
(b) the National Credit Code applies to the provision of the credit; and
(c) the individual is or will be unable to meet the individual's obligations in relation to the consumer credit; and
(d) as a result of the inability, an arrangement covered by subsection (3) affecting the monthly payment obligations of the individual is made between the credit provider and the individual which is either:
(i) a permanent variation to the terms of the consumer credit; or
(ii) a temporary relief from or deferral of the individual's obligations in relation to the consumer credit;
then the arrangement is a financial hardship arrangement .
Note: Financial hardship arrangements affect repayment history information: see subsection 6V(1A).
(2) For the purposes of this section, it does not matter whether the arrangement was initiated by the credit provider or the individual.
(3) This subsection covers any kind of agreement, arrangement or understanding, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings.
Examples: An arrangement might involve a credit provider agreeing to:
(a) defer or reduce required monthly payments for a temporary period; or
(b) accept interest-only payments for a temporary period; or
(c) extend the term of a loan to reduce monthly payments.
Financial hardship information
(4) If subsection 6V(1A) (about financial hardship arrangements) applies in determining repayment history information about an individual, then the following information is financial hardship information about the individual:
(a) for an arrangement referred to in subparagraph (1)(d)(i) (about permanent variations)--information, relating only to the first monthly payment affected by the arrangement, that indicates that the monthly payment is the first monthly payment affected by a financial hardship arrangement of that kind;
(b) for an arrangement referred to in subparagraph (1)(d)(ii) (about temporary relief or deferral of obligations)--information, relating to each monthly payment affected by the arrangement, that indicates that the monthly payment was affected by a financial hardship arrangement of that kind.
Note: Paragraph (b) may apply even if, under the arrangement, the individual is not required to make a payment for a month: see subsection 6V(1B).
(5) Paragraph (4)(b) does not apply in relation to a monthly payment under a financial hardship arrangement if:
(a) the individual met the obligation to make the monthly payment, as affected by the arrangement; and
(b) the amount paid was equal to, or greater than, the amount the individual would have been obliged to pay apart from the arrangement.