What to do if you can't pay a bill

Every protection in this area is stronger for a customer who makes contact early. Once an account is in default, sold to a debt collector or listed on a credit report, options narrow sharply and the listing can persist for years.

Ask for the financial hardship team by name. Frontline collections staff often have limited authority; hardship teams can vary payment amounts, extend timeframes, waive fees and place holds on enforcement.

Be specific about what you can pay. 'I can pay $40 a fortnight starting on the 12th' is a proposal that can be accepted. 'I can't pay' is not, and leaves the provider to decide.

Get every arrangement in writing, including the amount, the frequency, the duration and what happens if you miss one. Ask for a reference number for the call.

Energy retailers must have a hardship policy approved by the Australian Energy Regulator. It must include flexible payment options, information about concessions and grants, advice on lowering usage, and protection from disconnection while you comply with the arrangement. Disconnection for non-payment is subject to strict notice and process requirements.

Banks and credit providers must consider a hardship notice under the National Credit Code and respond within set timeframes. Options include reduced payments, a payment pause, extending the loan term, or capitalising arrears. For a mortgage this can be the difference between keeping a home and losing it.

Telcos must offer financial hardship arrangements under the Telecommunications Consumer Protections Code, including payment plans and restrictions on disconnection.

Water authorities are state-owned and every one operates a hardship program, typically including payment plans and access to state utility grants.

Government debts have their own arrangements: the ATO offers payment plans, Centrelink debts can be repaid by instalment, and state fines can usually be converted into a payment plan or a work and development order that clears the fine through unpaid work, treatment or courses.

The National Debt Helpline on 1800 007 007 connects you to a financial counsellor in your state. They are free, independent, not-for-profit, and they do not sell anything. This distinguishes them sharply from commercial 'debt agreement' and 'debt management' firms, which charge fees and frequently make outcomes worse.

A counsellor can negotiate directly with creditors, and creditors take their calls seriously because they are recognised participants in the hardship system. They can also identify unclaimed entitlements, apply for utility grants, and explain the consequences of options like debt agreements and bankruptcy without a commercial interest in the answer.

Every state also has emergency relief services providing food, vouchers and one-off assistance, and utility hardship grants that pay part of an overdue energy or water bill outright. These are administered differently in each state and are widely under-claimed.

If debt collectors are contacting you, know that their conduct is regulated. They cannot contact you at unreasonable hours, cannot contact your employer about the debt except in narrow circumstances, cannot mislead you about legal consequences and cannot harass you. Complaints go to ASIC or the ACCC, and to AFCA if the original creditor is a financial firm.

When there is not enough for everything, the order matters, and it is not the order the loudest creditor suggests. Prioritise debts where non-payment costs you something you cannot easily replace.

First: rent or mortgage. Losing housing is the outcome hardest to recover from, and hardship arrangements for both exist.

Second: essential utilities — electricity, gas, water — where disconnection has immediate consequences and protections apply if you engage.

Third: fines and court-ordered debts, which escalate through enforcement costs, licence suspension and, in some states, further legal consequences.

Fourth: secured debts such as a car loan where the asset can be repossessed, particularly if the car is needed for work.

Last: unsecured debts — credit cards, personal loans, buy-now-pay-later. These damage your credit report and can lead to judgment, but they do not take your home, your power or your licence. Paying them ahead of the categories above is the most common and most costly mistake.