BHP Strike Month Two: How to Apply for a Car Loan Hardship Variation Before You Default

Month two hits different

Four weeks into a BHP strike is annoying. Eight weeks in, with no clear return date and the strike pay or union hardship fund barely covering groceries, that car repayment sitting in your budget starts to look like a real problem. If you financed a ute or a family car through a dealer finance company, a bank or one of the non-bank lenders that do a lot of business with FIOF workers, you are not the only one in this position right now. Every roster crew with Escondida, Olympic Dam or the Pilbara operations affected has someone in the same spot.

Here is the good news nobody tells you until you ask: you do not have to just miss the payment and hope. Every consumer car loan in Australia regulated under the National Credit Code comes with a legal right to apply for a hardship variation. Lenders are obligated to consider it. This article is the actual step-by-step, not the theory.

What a hardship variation actually is

A hardship variation is a formal request to your lender to temporarily change the terms of your loan because you are experiencing financial difficulty, in this case an industrial action stopping your normal pay. It is not a favour. Section 72 of the National Credit Code gives you the right to ask, and lenders have internal hardship teams whose entire job is processing these requests. They are not the same people who send the default letters.

Common outcomes lenders can approve include:

• A repayment pause of one to three months (sometimes called a repayment holiday)
• Reduced repayments for a set period, say dropping a $620 fortnightly payment to $300
• Extending the loan term to lower ongoing repayments (useful if the strike drags past two months)
• Switching to interest-only for a short window, common with novated leases and balloon finance

None of these erase the debt. They buy you time and stop the account moving into default while the strike gets sorted, whether that is through EBA negotiation, mediation through the Fair Work Commission, or a return to work.

When to call, not if

The mistake most people make is waiting until they have already missed a payment. Call before that happens. Lenders are far more flexible with someone who rings ahead and says "my income has stopped because of industrial action, I want to arrange a variation" than with someone who has already gone 14 days late and triggered the automated default notice process.

If you are already a week or two late, that is fine too, but move now. Once an account sits unpaid for 90 days it typically gets flagged for potential repossession action and reported as a default on your credit file, which follows you for five years and makes your next home loan application a genuine headache.

The actual process, step by step

Every lender's process is slightly different but they all follow roughly the same shape because the regulator (ASIC) requires it under Regulatory Guide 165.

• Step 1: Find the hardship team, not general customer service. Ask specifically for "financial hardship" or "customer assistance." The big four banks, Latitude, Angle Finance, Money3 and most dealer finance arms all have a dedicated line or online form separate from general enquiries.
• Step 2: Explain the situation in one sentence. "I'm a BHP employee affected by the current industrial action, my income has been reduced/stopped, and I want to apply for a hardship variation on my car loan." You do not need to explain the whole dispute. They deal with this constantly during strikes, floods and mass redundancies.
• Step 3: They will send you a hardship application form. Most now do this by email or through the app within minutes. It asks for your income before and after, your expenses, and what you are proposing (pause, reduced payment, extended term).
• Step 4: Provide evidence. This is the part people skip and then wonder why the request stalls. Useful documents include your last three payslips, a letter or statement from the union or employer confirming the industrial action and your reduced pay status, and a basic budget showing income versus expenses. If you are receiving strike pay from the union, include that figure too.
• Step 5: Lender must respond within a set timeframe. Under the industry code most lenders aim to respond within 21 days, and many do it within a week for straightforward cases. If they ask for more information, provide it fast. Delays on your end reset their clock too.
• Step 6: Get the agreed variation in writing. Do not rely on a phone call. Ask for written confirmation of the new repayment amount, the start and end date of the arrangement, and what happens automatically when the arrangement period ends.

How long can you realistically buy

Most lenders will approve an initial arrangement of one to three months without much friction, particularly for a documented event like industrial action with a foreseeable end. If the strike goes beyond that, you can apply for an extension, but expect more scrutiny the second time, especially if there is still no resolution in sight. Some lenders will ask for updated evidence of your financial position at that point.

A realistic example: a $38,000 car loan with a $580 fortnightly repayment. A three month reduced-payment arrangement dropping that to $250 fortnightly during the strike, then a review once pay resumes, is a completely normal outcome. The difference between $580 and $250 fortnightly is roughly $2,970 over three months kept out of arrears, which is the gap between staying current and falling behind enough to trigger repossession proceedings.

What lenders need to see that you might not think of

A one-line email saying "I can't pay because of the strike" gets you nowhere fast. What actually moves these applications along:

• A dollar figure for your reduced income, not just "less than usual"
• A dollar figure for your unavoidable expenses (rent or mortgage, food, insurance, other loans)
• The gap between the two, and what repayment amount you can actually sustain
• Some indication of when things return to normal, even an estimate. "Enterprise agreement negotiations expected to conclude by [date]" is enough

Lenders are not asking these questions to be difficult. They are legally required to assess whether the hardship is temporary and whether a variation will genuinely get you back on track, versus just delaying an inevitable default. Give them the numbers and you make that assessment easy.

A hardship variation does not fix the strike. It stops a temporary cash flow problem turning into a five year mark on your credit file.

What happens if you do nothing

Missed payment one triggers a system-generated reminder. Missed payment two, usually around the 30 to 35 day mark, triggers a formal default notice under section 88 of the Code, giving you a minimum 30 days to fix the arrears before the lender can take further action. Ignore that and the lender can move toward repossessing the vehicle, particularly straightforward with car loans because the car itself is the security. Once repossessed, it typically gets sold at auction for well under market value, and you remain liable for the shortfall between the sale price and what you owed. That is the worst case, and it is entirely avoidable by making one phone call in week three or four rather than week ten.

A few things to keep in mind

Interest generally keeps accruing during a repayment pause, so the loan balance can grow slightly even while you are not paying. That is the trade-off for breathing room, and it is usually a fraction of what you would lose through default fees, repossession costs and a damaged credit file.

If you are also behind on a mortgage or personal loan, apply for hardship variations on all of them at once rather than triaging. Lenders assess your whole financial position and having multiple arrangements in place actually strengthens each individual application because it shows a coordinated, genuine hardship response rather than picking and choosing.

Finally, keep a paper trail. Save every email, note the date and name of who you spoke to, and follow up in writing if a verbal agreement was made on the phone. Strikes end, EBAs get signed, back pay sometimes comes through. When your income normalises, you want a clean record of exactly what was agreed so you can transition back to full repayments without a dispute over what the arrangement actually covered.