Communication is the key to financial hardship
Paul Ryan | August 01, 2017
In a radio interview last year, I was asked to provide some advice or guidance to the 550 workers who'd lost their jobs with Queensland Nickel.
Any advice or guidance for these workers had to be tempered with reports indicating they will not be receiving their full entitlements.
Usually, when a worker or employee loses their job there should be a clear understanding of the compensation they should receive. The amount of compensation should be dictated by law, the length of time in employment and their employment agreement.
If a worker receives their full entitlement it will hopefully offer a degree of comfort for an individual or family so they can continue to meet their financial obligations, family needs and give them a little breathing space as they attempt to get back into the workforce, and plan ahead in terms of a possible time frame to get back into the workforce.
Unfortunately, if a worker doesn't receive their full entitlements it may cause immediate financial hardship.
The loss of a job is emotional, creates fear of the unknown and raises many questions.
* How will I be able to put food on the table for my family?
* How will I be able to pay the bills on time?
* How will I be able to pay the mortgage?
From a finance perspective and paying the bills, communication is the key.
If you are experiencing financial hardship, as hard as it is, the most compelling thing you can do is communicate with your lender or service provider.
It is important to let them know your current situation and a lender or service provider will or should respect your position and willingness to communicate to develop a plan.
What lenders and service providers don’t like is when customers don’t return phone calls, emails or letters. It's paramount you don't close the lines of communication as you will, ultimately, force the hand of the lender or service providers to make decisions that will cost you more in the long term.
To open the lines of communication give your lender or service provider a call and let them know your personal situation. You can start by asking questions like:
1. Is there an opportunity for a 3-month pause in the repayments?
2. Can we develop a payment plan where you can make a part payment now and catch up in 3 – 6 months when you find new employment?
3. Can we transfer the loan from principal and interest to interest only?
4. Can we extend the loan term?
It is important to note that everyone’s personal situation will be different. If a friend or colleague ever mentions they made a certain arrangement with their lender or service provider it doesn’t necessarily mean the same opportunity will apply to others.
You may well be able to negotiate a similar arrangement but never assume it to be the case. For example, other customers may have more equity in the properties, they may have surplus funds in the redraw or offset accounts or they may have more funds in their superannuation. Everyone is different.
Lenders and service providers will always look at individual cases on their merits and as previously mentioned, they take numerous components of a customer’s situation into considerations.
The vital ingredient for anyone faced in such circumstances is to keep the lines of communication open.
