COVID-19 response

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Credit and debt

Your rights and obligations when you borrow money

What this chapter covers

This chapter includes information about the following:

  • Credit contracts: Hire purchase, loans and other credit – This section explains:
    • the new “lender responsibility principles”
    • the information you must be given by the lender (or “creditor”)
    • your rights to cancel the credit contract
    • interest and credit fees
    • when and how you can challenge an unfair credit contract
    • rules about repayment, including when you can ask the lender or the courts to relax the contract terms because of unforeseen hardship.
  • Guarantors – This section describes guarantors (people who agree to be responsible for someone else’s debt) and the rules and protections that apply to them.
  • Debt recovery and enforcement – This section explains how lenders can recover debts through debt collection agencies and through the courts. It includes information about:
    • how you can dispute that you owe a debt
    • how agencies can report on your credit history
    • your rights against debt collection agencies
    • rules that say when and how your property can be seized (“repossessed”) to pay off a debt (this property could be either hire-purchase goods or goods that you’ve put up as security for the loan).
  • When you can’t pay your debts: Bankruptcy and other options – This section explains bankruptcy and also two other processes: the no-asset procedure and summary instalment orders.
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