Hardship Mortgage Letter Template for New Zealand

When financial hardship threatens your ability to meet mortgage payments in New Zealand, a Hardship Mortgage Letter becomes your primary legal tool for seeking relief. This formal document triggers your statutory rights under the Credit Contracts and Consumer Finance Act 2003, compelling your lender to consider your hardship application and explore available assistance options.

When do you need this document?

You need a Hardship Mortgage Letter when unexpected circumstances significantly impact your ability to maintain regular mortgage payments. Common situations include sudden job loss or reduced income, serious illness or injury affecting work capacity, family breakdown or divorce leading to changed financial circumstances, or unexpected major expenses like medical bills. The document is also essential when you anticipate future payment difficulties due to known upcoming challenges, such as scheduled surgery or confirmed redundancy. Acting early by submitting your hardship application before missing payments demonstrates good faith and may result in more favorable assistance terms.

Key legal considerations

Your Hardship Mortgage Letter must include comprehensive financial disclosure to satisfy legal requirements under New Zealand law. Essential elements include detailed explanation of your hardship circumstances, complete current financial position including income, expenses, assets and debts, specific type of assistance you're requesting such as payment reductions, payment holidays, or loan modifications, and realistic proposal for how you plan to resume normal payments. The letter should be supported by evidence such as medical certificates, termination letters, or financial statements. Under the Credit Contracts and Consumer Finance Act, lenders must respond to hardship applications within a reasonable timeframe and cannot unreasonably refuse genuine hardship requests. However, you must demonstrate that the hardship is temporary and that you have a realistic plan for financial recovery.

Legal requirements in New Zealand

New Zealand's Credit Contracts and Consumer Finance Act 2003 provides specific protections for borrowers experiencing hardship through sections 55-57, which establish your right to seek mortgage variations and impose obligations on lenders to consider such requests fairly. The Responsible Lending Code 2021 further requires lenders to have appropriate hardship policies and procedures, including clear criteria for assessing applications and offering suitable assistance measures. Your letter must comply with disclosure requirements while the Privacy Act 2020 protects your personal financial information during the application process. Lenders cannot commence or continue enforcement action while properly considering a hardship application, providing you with temporary protection from foreclosure proceedings. The Property Law Act 2007 also provides additional borrower protections regarding mortgage enforcement, ensuring lenders follow proper procedures before taking possession action. If your initial hardship application is declined, you have rights to seek review through your lender's internal complaints process or external dispute resolution schemes.