Affected by cancer? A financial counsellor could help ease money stress
Dealing with cancer is costly and managing these costs can cause unnecessary added stress that can be alleviated with help from a financial counsellor.
Cancer Council NSW offers a financial counselling service to help you know your rights when it comes to hardship, the National Credit Code and dealing with creditors.
The National Credit Code defines hardship as a change in circumstances, such as ill-health, relationship breakdown, reduced working hours or unemployment.
You need to provide evidence of hardship to support your case and show how the change in circumstances has affected your day-to-day life.
Cancer Council financial counsellor Lynette Brailey says clients are referred to her from hospitals, health professionals or directly through Cancer Council's information and support service.
Is a financial counsellor right for you?
"Firstly, we have to establish whether patients are in the right spot, by explaining the role of financial counselling," says Brailey.
"We see people who are in financial distress or crisis who can't meet their financial obligations maybe through credit cards and personal loans, or other financial issues such as payment of medical costs, tax bills, or small business. It can be many things.
"It's never the same for each person - how they got into that crisis is the journey you need to understand.
"Often it can be quite a shock to the client when we tell them they need another $500 a week or month to meet their financial obligations - often it is due to debt and if they didn't have that it might be okay."
The counsellor needs a letter of authority to investigate bank accounts and speak to creditors, as well as a copy of your income or payslip benefits.
"We then ask for medical certificates or documents to support the diagnosis or treatment and also need copies of credit card and loan statements," says Brailey.
"We also do an assets and liability statement. We need to know how much equity they have in their property to establish a holistic approach to what that client's financial situation looks like."
From moratorium to bankruptcy
One solution might be a moratorium, which means no payments, interest fees or charges to be applied during a particular timeframe.
"This is a bit like a bandaid, to be considered if someone has lost their job and needs a holiday or break to get themselves back on track - maybe three to six months in total and then everything goes back to normal," says Brailey.
"From there they might need a long-term payment arrangement - where they can pay off debt but without interest fees or charges or perhaps a full and final settlement where we might make an offer to close the account for less than the loan amount, just to get if off the creditor's books.
"Sometimes clients can consolidate credit card debt with a bank credit card transfer, but then people need to be committed to not using the credit card again. This option can be a concern as it might cause the client to get further into debt.
For people who wish to discuss their debts with their creditor themselves, Brailey suggests it's important to speak directly to the creditor's hardship team.
"They can do an assessment directly or suggest a visit to a financial counsellor," she says.
"If you can't get a result, you can go through an internal dispute resolution in the bank, followed by an external dispute resolution such as the ombudsman."
"Bankruptcy is the final option, but it's never recommended as a first option," says Brailey.
Carol and Marty Kemister were both diagnosed with cancer and found meeting costs difficult when neither could work full-time, they had long distances to travel from the Blue Mountains to their treatment centres and had unexpected medical costs.
"One of the biggest expenses was an MRI Marty had to do, which was $600 upfront with no Medicare rebate," says Carol.
"At the time, I was thinking how am I going to pay the electricity bill?
"My surgery at a major Sydney hospital was going to cost $3000 in out-of-pocket expenses but we were able to successfully apply to the hospital under their hardship program, which greatly relieved our situation.
"We're grateful for that because we were doing mental gymnastics trying to figure out how to come up with that kind of money to remove the cancer," she says.
Tips for negotiating with creditors
1. Contact your credit provider as soon as possible.
2. Be clear on what you want - set something that is realistic, don't agree to a term you will be likely to default on. Don't set yourself up for failure.
3. Ask to speak to the bank or provider's hardship team rather than just frontline customer service staff.
4. Be willing to negotiate. You're the customer so ask what they can do for you: "I'm your customer. Do you have a more appropriate product or can you give me options to deal better with this debt."
5. Make sure you understand the arrangement or fine print on what you've agreed on, write down all details, when and who you called, and what was said.
This article is part of a collaboration between Cancer Council NSW and Money magazine to explore the key financial issues impacting Australians affected by cancer. To view more articles on this topic, click here.
If you are a lawyer, financial adviser, accountant or HR professional interested in volunteering through Cancer Council's Pro Bono Program, please contact the team at email@example.com. If you have any questions or concerns about cancer, please call Cancer Council's 13 11 20 Information and Support Service. If you would like to donate to help Cancer Council's services offering support to cancer patients in need, head to cancercouncil.com.au/support20.