The Role of Legal Hardship Protections in Coping with Debt Problems: Insights from a Survey of Consumers

Competition and Consumer Law Journal, Vol. 24, No. 2, pp. 77-100, 2016

22 Pages Posted: 28 Nov 2016

See all articles by Paul Ali

Paul Ali

University of Melbourne - Law School

Evgenia Bourova

University of Melbourne - Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Date Written: November 24, 2016

Abstract

Special protections for Australians in financial hardship have recently been incorporated into the legal frameworks governing the consumer credit, energy, water and telecommunications sectors. These protections have the objective of enabling consumers to avoid the serious legal consequences of financial hardship, such as debt enforcement action in a court or tribunal, or disconnection from an essential service, by allowing them to seek alternative payment arrangements and other forms of assistance from their creditors. In this article, we draw upon the findings of our survey of consumers who have experienced financial hardship to show that these legal protections play a relatively modest role in the overall range of ways in which consumers cope with debt problems. Consumers face significant barriers to identifying themselves as being in need of assistance under these protections, and tend to favour individualistic strategies for reducing spending, even when this may jeopardise their ability to afford basic living essentials. For those who do access assistance from a creditor under the legal hardship protections, its effectiveness may be undermined by the prevalence of unaffordable payment arrangements across our target sectors.

Keywords: Consumer Protection, Financial Hardship, Consumer Credit, Energy, Water, Telecommunications

Suggested Citation

Ali, Paul and Bourova, Evgenia and Ramsay, Ian, The Role of Legal Hardship Protections in Coping with Debt Problems: Insights from a Survey of Consumers (November 24, 2016). Competition and Consumer Law Journal, Vol. 24, No. 2, pp. 77-100, 2016. Available at SSRN: https://ssrn.com/abstract=2875555 or http://dx.doi.org/10.2139/ssrn.2875555

Paul Ali

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 1088 (Phone)
+61 3 8344 5285 (Fax)

HOME PAGE: http://www.law.unimelb.edu.au

Evgenia Bourova

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

Register to save articles to
your library

Register

Paper statistics

Downloads
84
Abstract Views
535
rank
301,651
PlumX Metrics