Financial hardship and prison
Once you are in prison it can be very difficult to manage and keep up to date with your financial obligations. You won’t have access to the internet and contact with the outside world is limited to monitored phone calls and letters. It can be hard to access paperwork, such as identity documents or bank statements.
It is really important to take some practical steps to manage your financial situation BEFORE you go to prison.
Some prisons have a visiting financial counsellor who may be able to help you. Once you are in prison, do check with prison staff to see if you have access to one and if so, make an appointment.
What to do BEFORE you go to prison.
Figure out what income and assets you have (if any)
- Do you have any holiday pay owing or long service leave?
- Are you earning any income from investments? If so, how much?
- Do you have any savings?
- Do you have any assets? A house, car, motor bike etc? If so, how much are they worth? Are there any you or your family don’t need and can sell?
- Are you likely to receive any prison payments or allowances above your basic amenities allowance?
- Are you owed any refund from a tax return?
Figure out what your financial obligations are
Financial obligations are any regular payments or outstanding debts that you must make. For example: regular payments for a mobile phone plan is a financial obligation.
Make a list of your financial obligations, how much you owe, what your regular payments are and the names and contact details of each provider or creditor. This makes it easier to work out what your options are, make decisions and who you may need to notify before you go to prison.
This list should include things like:
- Child support obligations
- All loans, including car, home, payday, consumer leases, buy now pay later
- Credit card debt
- Centrelink debt
- Body Corporate fees
- Rent or mortgage
- Subscriptions – like Netflix, Foxtel and gym membership
- Home phone, mobile and internet
- Tax debt
- Utilities – gas/water/electricity
You can use this “Checklist of financial obligations” to make sure you have covered all of your commitments and debts and what you need to do.
If you are not sure what credit and debt you already have then you can get a copy of your free credit report. More information about how to get your credit report here. Your credit report may not show all of your debts. Obtaining your credit report may also mean debt collectors will contact you at your current address.
Make a plan for how your financial obligations will be managed while in prison
- What are your highest priority obligations?
A home loan may be a high priority debt. How will the home loan be paid while you are in prison? More information about how to Prioritise Your Debts is here.
- Can you sell any of your assets to repay loans or debts?
The decision to sell assets can be difficult especially if it is a house or car. More information about Selling Assets is here.|
- Will someone else be able to keep making repayments?
Caution: If someone else is making repayments on your behalf, keep in mind that if they don’t follow through you are still liable and will wear the consequences. If you are not certain that everything will go as planned, then you need to talk to your creditor and come to an arrangement (see step 4 below) and/or sell the asset.
- Are there any services or subscriptions you will no longer need and can cancel?
For example: electricity, internet, Netflix, mobile data, etc.
- Do you have direct debits in place that you need to cancel?
More information about how to Cancel a Direct Debit is here.
- Do you need to appoint a trusted person as a power of attorney?
A power of attorney is a person you appoint to manage financial matters on your behalf when you are in prison. You can find out more from the relevant agency in your state or territory.
- ACT https://www.ptg.act.gov.au/powers-of-attorney
- NSW https://www.tag.nsw.gov.au/wills/make-power-attorney
- NT https://nt.gov.au/law/processes/power-of-attorney
- Qld https://www.pt.qld.gov.au/enduring-powers-of-attorney/about-enduring-powers-of-attorney/
- SA https://publictrustee.sa.gov.au/wills-services/power-of-attorney/
- TAS https://www.publictrustee.tas.gov.au/enduring-power-of-attorney.html
- Vic https://www.statetrustees.com.au/power-of-attorney
- WA https://www.wa.gov.au/service/justice/civil-law/enduring-power-of-attorney
Notify your creditors that you are going, or may go, to prison
- Explain to your creditor that you will be going or may go to prison. Do not be afraid to explain this to your creditor.
- Tell your creditor you will be in financial hardship because you will have very little income in prison.
- Work with your creditors to negotiate workable repayment arrangements. This could be:
- For shorter term sentences: a deferral of payments until you are released from prison
- For joint debts (where the loan is with you and someone else) – whether the other debtor will be making repayments. If reduced repayments are required, let the creditor know this.
- For longer term sentences: speak to a financial counsellor as these situations can be more complex.
If you can’t agree with your creditors, you can dispute it
If you can’t agree on an arrangement with your creditors that you think is fair and reasonable and that will work for you, then you may be able to lodge a dispute with an external dispute resolution (EDR) scheme. EDR schemes are free and independent services that can help you negotiate further and sort out your issue.
If your debt is from one of the following types of businesses then there is an EDR scheme that you can complain to:
- Insurers, credit providers (banks, payday lenders, car loans, etc), finance brokers, financial advisers or superannuation funds
- gas or electricity providers
- telephone or internet providers
See Complaints and Disputes for more information.
Speak to a free financial counsellor
- If you’re feeling overwhelmed and need some help to deal with your debts and other financial obligations then a financial counsellor can help.
- Financial counsellors aren’t judgmental about your circumstances – they’re here to offer you free, confidential and independent advice and assistance.
- You can contact the National Debt Helpline and speak to a financial counsellor by phone OR you can make an appointment to see a financial counsellor in your local area.
- National Debt Helpline – call 1800 007 007 – open Weekdays from 9:30 am to 4:30 pm.
- Find a local Financial Counsellor – https://ndh.org.au/talk-to-a-financial-counsellor/find-a-financial-counsellor/