Investa Solutions Blog

08:45 AEST Mon Apr 27 2009
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The federal government is set to unveil new measures to ease the plight of those struggling to repay mortgages.

Superannuation and Corporate Law Minister Nick Sherry said under existing arrangements, someone experiencing financial hardship could go to their financial institution and seek relief for debts up to $312,000.

That limit is to be increased to $500,000.

"If the financial institution says no to your hardship, then for the first time we are introducing a low-cost independent dispute tribunal which will be able to hear and determine your argument if the financial institution doesn't agree," he told ABC television.

Senator Sherry said this would apply in situations such as where a person became unemployed and started to fall behind on payments.

He said solutions could include some level of suspension of repayment of interest or the primary debt.

Senator Sherry said financial institutions would be required to agree to tribunal decisions.

He said the overhaul of the financial credit laws would also for the first time include a responsible lending provision.

This would require the institution to ensure the product was suitable and that the borrower had a capacity to repay.

"This is the first time in law in Australia that we will have a responsibility provision introduced," he said.

© AAP 2009