If you’re in financial trouble, a financial counsellor might be able to help. Here’s a quick guide to what a financial counsellor can help you with.
When financial matters go wrong, they can go really wrong quite quickly. From time to time, many people from all walks of life find themselves struggling to buy food, pay the rent or mortgage, and juggling multiple debts on credit cards or personal loans. This is where a financial counsellor can make all the difference in the world.
Note that this article relates to the free financial counsellor or debt counselling services provided in each state and territory. Financial counsellors are a free and independent service.
We are NOT talking about debt management firms, which charge a fee for service. ASIC recently released an interesting report on debt management firms.
What is a financial counsellor?
A financial counsellor works for the community agencies in all states and territories, providing free, independent, and confidential information to assist people in financial difficulty. They work with their clients to help them get out of the cycle of debt and take control of their finances.
They can negotiate repayment arrangements with creditors on your behalf, help you apply for a financial hardship variation on your bills or repayments, explain debt recovery procedures, and perhaps refer you to other services for further help.
A financial counsellor will:
Help you get a clear picture of your overall financial situation
Explain what options you have in relation to your debts and the advantages and disadvantages of them
May advocate or negotiate with creditors, government agencies and others
Listen and provide support
A financial counsellor is on your side and nobody else’s. They have strong links with other service providers, so they can refer you to other agencies which can give you extra help, such as community legal services (e.g. Legal Aid), housing bodies (e.g. National Rent Affordability Scheme), the gambling helpline, family support services, personal counselling, and more. But they won’t make you go if you don’t need or want to.
Financial counsellors have an extensive knowledge of a range of areas of law and policy, including the law about credit cards and loans, debt enforcement practices and repossession, bankruptcy, financial hardship policies, and government concession frameworks.
Funded largely by either State Governments or the Federal Government, financial counsellors can help you understand your options so that you can get back on your feet without incurring even more debt.
Other areas a financial counsellor can assist include suggesting ways to improve your financial situation and how to do a budget.
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Do I need a financial counsellor?
If you find yourself with any of the following problems, make an appointment to talk to a free financial counsellor:
Debts that you are struggling to pay
Threatening letters or harassment by debt collectors
Debt recovery through the courts
House eviction, disconnection of gas, electricity, phone, etc.
Uninsured car accidents, taxation debts, and unpaid fines
How do I find a financial counsellor?
You can speak with a financial counsellor in person or over the phone. Financial counsellors are located across Australia. You can find a financial counsellor near you on the Financial Counselling Australia website.
There is also a free national hotline you can call – 1800 007 007. This financial counselling hotline is open from 9.30am to 4pm Monday to Friday. When you call this number you will be automatically transferred to the phone service in your state.
You can also visit the Financial Counselling Australia and ASIC MoneySmart websites for more information.
A financial counsellor is free – you should not have to pay
Debt counselling from a financial counsellor is free.
If at any stage, you are speaking with someone who calls themselves a “financial counsellor” or “debt counsellor” and they ask you to sign an agreement which includes paying any costs or fees, don’t sign it. Check it out carefully and do not sign up for their service. Get advice from a free, government-funded, financial counsellor instead before doing anything else.
There are a growing number of debt solution services advertising on television, radio, and local newspapers that say they can solve your debt problems. Some of them are very expensive and they don’t explain to you the full range of choices and options you may have. They may focus on one solution, such as a Debt Agreement (under the Bankruptcy Act) or budgeting. These “solutions” often provide greater financial benefit to the company offering them, than they will to you. So don’t be fooled.
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This advice is general and has not taken into account your objectives, financial situation, or needs. Consider whether this advice is right for you. Consider the product disclosure statement (PDS) of any loan before making a purchase decision. For more information, read Canstar’s FSCG.
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