Relief for debt-stricken Cantabrians post quake

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Cantabrians struggling with debt after the earthquake may be eligible for financial relief under the Credit Contracts and Consumer Finance Act.

Consumers have the right to ask for a variation of their repayment obligations on consumer credit contracts on the grounds of hardship, the Commerce Commission said.

However there are restrictions - debtors must be up to date with repayments at the time the application is made for it to be eligible.

The provisions allow for a reduction in the amount of each payment by an extension of the term of the contract, or a postponment of the dates in which payments are due, which would also push out the length of the contract, the Commerce Commission said.

People struggling to make repayments on personal loans, mortgages, credit cards or other consumer credit repayments because of a loss of employment, a reduction in work hours or reduced income may be eligible, Commerce Commission enforcement branch manager Graham Gill said.

Those who have an unexpected expense as a result of an unforeseen event, such covering the costs of temporary accommodation while their home is fixed, may also be eligible under the Act.

Gill encouraged businesses providing credit to educate themselves about hardship provisions, so they can deal with the applications appropriately.

"The Commerce Commission expects that more consumers will make applications to creditors under the unforeseen hardship provisions as a result of the financial impact of the earthquakes."

"It is important that creditors provide correct information about debtors' rights when they are asked, or they risk breaching the Fair Trading Act," Gill said.

- NZ HERALD ONLINE