The law firm has advised that newly instituted regulations regarding hardship notices may have muddied the waters for lenders. Previous regulations required borrowers to specifically request hardship relief, but Gadens partner Amber Warren said new regulations meant hardship notices could be triggered orally.
"The biggest difficulty for many lenders will be to determine when an oral hardship notice has been given under the new rules," Warren said.
Warren said the regulations were unclear about what specifically constituted a hardship notice.
"For example, does a debtor give a hardship notice if they call the lender upon receipt of a default notice, to say that they are unable to pay their arrears? Or is something more required?"
Warren commented that the position on hardship notices needed clarification to ensure the new regime was workable for lenders and borrowers. She said Gadens had written to ASIC seeking guidance "as to the specific possible trigger situations during the enforcement process".
