If you haven’t been able to resolve a dispute with your lenders or they refuse to offer you a hardship variation, you can take the matter to the Credit List of the Victorian Civil and Administrative Tribunal (VCAT) where a wide range of disputes between those who provide and those provided with finance in the form of credit are heard.
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What is VCAT?
VCAT is a tribunal, similar to a court of law but less formal. Credit matters are usually taken to mediation in the first instance. Mediation involves bringing the parties to a dispute together to resolve their issues by agreement with the assistance of an experienced mediator or member of the tribunal. If the parties cannot reach a resolution through mediation, a hearing is listed. At VCAT, a tribunal member hears the evidence of both parties to a dispute and makes a determination.
VCAT is intended to be accessible to people who are not legally represented, however parties at a VCAT credit list hearing can choose to have legal representation. An unrepresented debtor can also request that their creditor not be legally represented.
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When to go to VCAT
You can apply to VCAT for an order to change the terms of your contract if you’ve written to your lender or creditor and requested a hardship variation to the terms to your contract and your lender has either:
- refused to agree to a change; or
- failed to respond to your request for a payment variation within 14 days or a shorter period if the matter is urgent.
You can also ask VCAT to put a hold on any action by your lender to pursue your debt through the courts, providing the matter has not already been dealt with in the courts and a determination made.
You will have to pay a standard lodgement fee of approximately $35 when you apply for a VCAT hearing. VCAT may waive that fee on the grounds of hardship.
Keep a copy of all documents submitted and record details of all contact with your creditor and VCAT.
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Urgent VCAT applications
You may apply for an urgent VCAT hearing where your lender or creditor is either threatening court action to recover a debt, or where court proceedings have been commenced.
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How to prepare for VCAT
You should discuss your credit dispute with a financial counsellor or Consumer Action Law Centre if you need assistance to identify the appropriate section of the Consumer Credit Code upon which to base your application for VCAT hearing.
To prepare for VCAT you should:
- photocopy all documents relevant to your dispute
- read the Credit List User’s Guide so you know what to expect at the hearing,
- complete and submit a Form 2 – ‘Claim relating to a credit dispute’, with assistance from a financial counsellor if possible,
- write yourself notes about what you want to say at the hearing – this will help clarify the facts, and what you want to achieve at the hearing.
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What happens at VCAT
VCAT will advise your lender or creditor that your application has been received. They will also provide them with all relevant documents, and advise them of any mediation or hearing dates.
VCAT will advise you within 14 days of how it will handle your application. Urgent applications may be dealt with in a shorter time. VCAT usually organises a mediation session between parties to a dispute about credit and debt matters as the first stage to resolving the dispute.
A tribunal member will conduct the VCAT hearing and ask parties to the dispute to outline the substance of the matter and the outcome they want to achieve from the hearing.
VCAT will determine if your lender must provide you with a hardship variation if you are experiencing financial hardship that is only expected to be relatively short-term.