There are certain changes that credit providers can unilaterally make to the credit contract. For example, changes to the interest rate or fees and charges, so long as the notice provisions of the Code are followed.
There are different rules about the appropriate notice to the consumer, depending on what is being changed. For example, there are longer notice periods that apply to a change in fees than a change in the interest rate. You must check with the provider, and get advice if you believe the appropriate notice has not been given.
Changes by agreement
You can make an agreement with the credit provider to alter the terms of the loan. However, get legal advice or the assistance of a professional with appropriate expertise.
Changes due to hardship
Of course anyone can be subject to a change in their circumstances, perhaps because of unemployment or illness. You can ask the provider to change the terms of the contract so long as you believe you can adhere to an alternative arrangement e.g. change the payment schedule to extend the loan but reduce the individual payments. If you cannot come to an agreement contact ASIC for advice. There are also specialised consumer law centres in some States and Territories (ring Legal Aid in your State for information).
When partners split
Think very carefully, and get appropriate legal advice, before you agree to be a "co-borrower".
Sometimes co-borrowers (e.g. partners in a domestic relationship) who have both signed the contract go their own ways. Who is liable for the repayments? Under the law the co-borrowers are "jointly" liable for the total debt. That means that you could be responsible for the whole amount of the loan if the co-borrower defaults. Get legal and financial advice before you are in default, or as soon as you are aware the loan is defaulted.
Last Updated – June 2012