Free help first
- National Debt Helpline: free financial counselling by phone on 1800 007 007, webchat or in person. A financial counsellor can work out a budget with you, explain your options and negotiate with your creditors.
- Your lenders and providers: banks, credit card and buy now pay later providers must consider a hardship request. Energy, water and phone companies have hardship programs too.
- Moneysmart: ASIC’s free guidance on dealing with debt.
Find more on our free money help page.
- 1 Talk to a free financial counsellor National Debt Helpline, 1800 007 007 Nothing on your credit report
- 2 Ask your lender for hardship help Lower or paused repayments for a while Noted for 12 months, not used in your score
- 3 Debt agreement Repay part of what you owe, over up to 3 years (5 if you own a home) On your credit report for at least 5 years
- 4 Bankruptcy Clears most debts, usually after 3 years On your credit report for at least 5 years
Debt agreements and bankruptcy are also listed for good on the National Personal Insolvency Index, a public record.
Asking for hardship help
Call or write as soon as you think you’ll miss a payment. Say you’re in financial hardship, explain what’s changed, and offer what you can afford. Your lender might pause repayments, lower them for a while or extend the loan. Keep a note of who you spoke to and what was agreed.
Pay essential bills first: your rent or mortgage, energy, and anything that can lead to losing your home or a car you need for work. If you owe tax, the ATO can set up a payment plan.
If a lender won’t help or treats you unfairly, you can complain to the Australian Financial Complaints Authority (AFCA) for free. Debt collectors must also follow rules from ASIC and the ACCC: they can’t harass you or contact you at unreasonable times.
The formal options
| Option | What it is | Good to know |
|---|---|---|
| Hardship arrangement | Your lender agrees lower or paused repayments for a while | Free. Ask in writing, and a financial counsellor can help |
| Debt agreement | A legally binding deal to repay part of what you owe over time | From September 2026: unsecured debts up to $155,773.80, after-tax income up to $116,830.35, and assets up to $311,547.60. Recorded on your credit report and the National Personal Insolvency Index |
| Bankruptcy | Clears most debts | Usually lasts 3 years. Some assets can be sold, and some jobs and travel are restricted |
The Australian Financial Security Authority (AFSA) oversees debt agreements and bankruptcy, and updates the debt agreement limits twice a year. In a debt agreement, you usually repay over up to 3 years, or 5 if you own or are buying a home. In bankruptcy, a trustee can sell some of your assets, and you pay part of your income if it’s above a set limit.
Watch out
Be wary of debt management firms that charge fees for things a free financial counsellor does, or push you into a debt agreement. Free advisers will look at your whole situation and tell you every option, not just the one they sell. Never use your super or a payday loan to cover debt repayments without getting free advice first.
Working through it yourself? See how to pay off debt.