BNPL financial hardship in Australia: Afterpay, Zip, Klarna and Latitude

Buy-now-pay-later (BNPL) financial hardship is when you can’t reasonably keep up with payments to providers like Afterpay, Zip, Klarna or Latitude because of unexpected illness, job loss, family circumstances, or any change to your situation that wasn’t there when you opened the account. Since 10 June 2025, BNPL has been regulated as low-cost credit under the National Consumer Credit Protection Act, which means BNPL providers must respond to a hardship request within 21 days, must be members of the Australian Financial Complaints Authority (AFCA), and can’t default-list you while a hardship application is being assessed.

This guide is for people who have one BNPL account they can’t pay, and people who have several BNPL accounts plus a credit card or a personal loan all at once. It explains your rights, walks through how each major provider’s hardship process actually works, tells the truth about credit-file impact, and lays out what to do if a provider says no.

It also tells you, repeatedly, that the National Debt Helpline is free on 1800 007 007 and is the right first call for many people. We’re a paid service. Our job is to be honest about when paying us is worth it and when it isn’t.

What “financial hardship” means for a BNPL account

Financial hardship is a legal term, not a marketing one. Under section 72 of the National Credit Code (which is Schedule 1 to the NCCP Act), it means you reasonably can’t meet your obligations under a credit contract because of a change in your circumstances. The classic triggers are illness, accident, loss of employment, separation, family violence, natural disaster, and other significant life events — but the law isn’t prescriptive. Anything material that wasn’t there when you signed up counts.

For BNPL specifically, hardship usually shows up in one of three shapes:

• You missed a payment last week. You’re hoping to catch up before the next one but you’re not sure you can. Late fees are starting to add up.
• You’re three or four payments behind on one account. The provider has started calling. The account may already be locked.
• You have several BNPL accounts, all of them missing payments. This is the situation almost every consumer-help page in Australia underserves. We’ll come back to it.

In all three cases the law gives you the same starting point: a written hardship notice triggers obligations on the provider that did not exist a year ago.

Your rights since 10 June 2025

Until June 2025, BNPL in Australia sat outside the regulated credit framework. Providers complied with the voluntary BNPL Code of Practice, which was useful but not enforceable in the way credit-card rules are enforceable. That changed when the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 brought BNPL inside the NCCP Act as a new category of low-cost credit.

NCCP coverage and AFCA membership

BNPL providers offering credit in Australia must now hold an Australian Credit Licence and be members of AFCA. That means you can escalate a complaint to a free, independent ombudsman if a provider refuses to engage with your hardship request — the same body that handles your credit-card and home-loan disputes. ASIC’s Regulatory Guide 271 on internal dispute resolution applies. So does its Regulatory Guide 274 on hardship arrangements once a credit contract is involved.

A small note on our own posture, because it matters: Hardship Hub provides credit assistance as an authorised representative of Revive Financial Pty Ltd, which holds an Australian Credit Licence. We sit inside the same regulatory perimeter the BNPL providers are now obliged to sit inside. The full disclosure is in our Financial Services Guide.

The 21-day response window — what providers must actually do

Once you give a BNPL provider written notice that you can’t pay, the law gives them 21 days to respond in writing. During that 21 days, several things must happen:

1. The account is held while the request is assessed. The provider can’t add new late fees or referral fees in respect of the missed payments under review while the application is open.
2. The provider can’t list a default against your credit file in respect of the contract for the missed payments under review while the application is open.
3. The provider can ask for information — a recent payslip, a statement of your income and outgoings, evidence of a life event — but only what’s reasonably necessary to assess your request.
4. If the provider says yes, they must give you a written variation that reflects whatever’s been agreed: a pause, a reduced payment for a period, an extended term.
5. If the provider says no, they must give you reasons in writing. If those reasons aren’t adequate, the next step is internal review and then AFCA.

Day 22 is important. If you’ve heard nothing, you have a complaint — not a bigger problem to solve quietly, a complaint with a clear escalation path. Most providers respond inside 21 days, but if yours doesn’t, that’s actionable.

The BNPL Code, briefly

The BNPL Code of Practice still exists and AFIA members continue to comply with it. It overlaps with the NCC obligations rather than replacing them, and on hardship the Code largely points at the same outcomes the law now requires. Where the Code adds value is in the more granular conduct rules — advertising, marketing to vulnerable customers, suitability assessments. For day-to-day hardship questions, the law is the higher standard.

How to apply for hardship — provider by provider

Each provider runs the assessment slightly differently. The legal floor is the same; the form, the evidence requested, and the typical response time vary. Apply in writing in every case — never just over the phone — so the 21-day clock and your written record are both unambiguous.

Afterpay

Afterpay’s hardship process is run through its Help Centre. You can request hardship from inside the app or by completing the online hardship form. Afterpay typically asks for a brief description of your situation, your contact details, and whether you’d like the account paused, payments reduced, or the term extended.

A common Afterpay outcome is a pause of 30–90 days with the account locked from new orders during the pause. Late fees that have accrued are usually waived if the request is granted. If your situation is longer-term, ask for a written variation rather than a goodwill pause — the variation has the protection of the NCC behind it.

Zip

Zip’s hardship and vulnerability page is the right starting point for both Zip Pay and Zip Money customers. Zip Money in particular is a regulated credit product, so the full NCC framework has applied to it for longer than to Zip Pay. Either way, request hardship in writing through the support form and ask for a written response.

One specific Zip note: if you have both Zip Pay and Zip Money on the same login, treat them as two separate accounts in your hardship request. Zip will assess each on its own merits.

Klarna

Klarna’s experiencing hardship page is where to start. Klarna runs a structured assessment and tends to respond within 7–10 business days. They will commonly ask for a short statement of your situation and may ask for evidence of a triggering event (e.g. a separation certificate, a medical letter) for longer-term arrangements. For short-term pauses they typically don’t.

Latitude

Latitude is structurally different from the other three. Latitude Financial Services holds an Australian Credit Licence and has run regulated credit products (including credit cards branded as Latitude, Gem, GO, and 28 Degrees) for years. Its hardship process is correspondingly more formal. Start at Latitude’s Hardship Care page and either complete the online form or call the dedicated hardship line listed there.

Because Latitude has been operating under the NCC framework for years, the 21-day clock and the credit-reporting consequences have been clearly defined for longer. Variations under Latitude tend to be more structured (reduced payment for a fixed period, then a step-up) rather than open-ended pauses.

What hardship arrangements actually look like

A “hardship arrangement” isn’t one thing. It’s a category of variations to the original contract. The three main shapes:

• A pause. Payments stop for a defined period — usually one to three months. The account is typically frozen from new transactions during the pause. Useful when the change in your situation is short-term.
• A reduction. You keep paying, but a smaller amount, for a defined period. Useful when your income has dropped permanently and you can manage something, just not the contracted amount.
• An extension. The term gets stretched. Each payment stays roughly the same but for longer. Useful when a one-off shock means the original timeline isn’t realistic.

Hardship arrangements aren’t debt forgiveness. The provider isn’t writing off what you owe. The whole point of section 72 is that you keep your contract alive on terms that match your changed circumstances. That’s usually a much better outcome than a default and a long fight on the credit file.

What providers can’t typically agree to during a hardship variation: a permanent reduction in the principal owed, or a settlement at less than the full balance. Those are different conversations — usually triggered by significantly worse circumstances and almost always handled with formal financial counselling support.

Will BNPL hardship show on my credit file?

This is the question every consumer asks first and the question almost every page in the SERP answers either incorrectly or incompletely. The honest answer is: it depends, and the rules changed in 2022, and again in 2025.

Here’s the framework, in plain English. Australia’s credit-reporting system is governed by Part IIIA of the Privacy Act 1988 and the Credit Reporting Code, with the OAIC as the regulator. Under that framework:

• Applying for hardship is not, by itself, a default listing. The hardship application doesn’t put a black mark on your file.
• Repayment History Information (RHI) can be flagged as a financial hardship arrangement. Since 1 July 2022, when a credit provider grants a hardship variation under Part IIIA, they must report it to the credit bureaus with a specific “financial hardship indicator”. The flag stays on your file for 12 months from the end of the arrangement.
• This applies to BNPL post-June-2025. Now that BNPL is regulated credit under the NCCP Act, BNPL hardship variations are subject to the same Part IIIA reporting framework as credit-card and personal-loan hardship variations.
• If hardship is refused and you fall into default, that is reported. The default will show on your file for five years. This is the outcome the early-stage hardship request is specifically designed to prevent.

The practical implication: a hardship variation costs you a 12-month indicator on your file, but it protects you from the much heavier 5-year default listing. For most people in trouble, that’s a clear trade. The OAIC has the full consumer-side explanation here.

A side note on us: the credit-related data we hold while assisting with a hardship application is governed by the same Part IIIA framework. Our Privacy Policy sets out what we collect, why, and who we share it with.

What to do if your hardship is refused

Refusals happen. Sometimes the provider is right — the request didn’t demonstrate hardship in any reasonable sense, or the variation asked for was disproportionate. Sometimes the provider is wrong — the assessor missed a piece of evidence, or the system applied a generic decline rule that the regulator wouldn’t support if it saw the file. Either way you have a structured next step.

1. Read the written reasons carefully. The provider must give them. If the reasons don’t match the facts of your situation, that’s the basis of your internal complaint.
2. Lodge an internal complaint. Every BNPL provider has an internal dispute resolution (IDR) team. Under RG 271, they must respond within 30 days. Use the IDR address, not the general support inbox — the clock starts when IDR receives it.
3. Escalate to AFCA. If IDR doesn’t resolve it, or if you’ve waited 30 days without a substantive response, lodge with AFCA at afca.org.au or by phone on 1800 931 678. AFCA’s service is free to consumers, even though the provider pays a per-case fee. AFCA can order a hardship variation if it concludes the provider got it wrong.

One thing worth saying out loud: you don’t pay AFCA, and you don’t need a paid agent to lodge an AFCA complaint. The Financial Rights Legal Centre publishes a strong factsheet on doing this yourself, and the National Debt Helpline can help you draft and lodge.

If you have more than one BNPL account (or BNPL plus other debts)

Most consumer-help pages in Australia walk you through how to handle one BNPL account. The reality for a lot of people is three of them open at once, plus a credit card, plus maybe a small personal loan. Each provider can only see its own account. The 21-day clock runs separately on each one. If you’re juggling four hardship requests across four providers, you’re running four parallel processes with four different forms, four different timeframes, and four different evidence asks — while you’re already in financial stress.

There are three honest options.

One: do it yourself. Lodge each hardship request in writing on the same day. Use the same evidence pack for all of them. Track responses on a spreadsheet. Where one provider refuses, escalate to AFCA without delay. This works. It’s the cheapest option. It costs you time and emotional bandwidth at exactly the moment you have least of either.

Two: get free help. The National Debt Helpline can negotiate with creditors on your behalf at no cost to you. Way Forward Debt Solutions is a free debt-management service backed by Westpac that handles arrangements across multiple creditors. Both are excellent and both are free. Eligibility for Way Forward in particular has criteria; not everyone fits. NDH never has eligibility criteria — they take all calls.

Three: pay for a coordinated plan. A regulated provider can lodge hardship requests with all your creditors in parallel, negotiate the terms, and bundle the resulting payments into one direct debit you make to the provider, which is then distributed to the creditors. A Temporary Hardship Plan with Hardship Hub is one of these — the others are mostly Part IX debt-agreement administrators, which is a more formal and more consequential framework.

None of those three is the right answer for everyone. If you have one BNPL account in trouble and a stable income otherwise, doing it yourself is fine. If you have two creditors and a few hours to spare, NDH is fine. The case for a paid plan starts when you have three or more creditors and you need someone to coordinate, fight the refusals, and make sure the AFCA escalations land cleanly.

Free help that’s always the right first call

Before any of the above, three numbers worth keeping somewhere you can find them:

• National Debt Helpline: 1800 007 007. Free, independent, government-funded. Open 9.30am to 4.30pm weekdays.
• Mob Strong Debt Help for First Nations callers: 1800 808 488.
• Financial Rights Legal Centre for legal advice on credit, debt and insurance: 1800 007 007 (same number as NDH).

If you’re unsure whether you need any paid help, call NDH first. The advice is free. If your situation is straightforward enough that NDH can sort it, that’s the right answer.

When a Temporary Hardship Plan with Hardship Hub fits

We’re not the right call for someone with one creditor and a stable income. We’re built for people with three or more creditors who need coordination — typically a couple of BNPL accounts, a credit card, and maybe a personal loan or a phone bill. The plan bundles them into one monthly payment based on what your income actually supports under the Household Expenditure Measure (HEM) benchmark, and we deal with each creditor under section 72.

The fees are a one-off application fee, plus a small transaction fee for each payment we send to one of your creditors. Current pricing is on the pricing page — we don’t restate it here in case it changes. There are no exit fees, and the National Debt Helpline does most of what we do at no cost. We’re honest about that because it’s the truth and because RG 271 requires it.

FAQs

Does applying for Afterpay hardship affect my credit score?

The application itself isn’t reported to the credit bureaus. If a hardship variation is granted, a 12-month financial hardship indicator is added to your repayment history information for that account, under the Part IIIA framework that has applied since July 2022 and now applies to BNPL post-June-2025. That’s usually a much better outcome than a default listing, which would stay for five years.

How long does Afterpay, Zip, Klarna or Latitude take to respond to a hardship request?

The legal maximum is 21 days from the date the provider receives a written hardship notice. Most providers respond inside 7–10 business days. If you’ve heard nothing on day 22, that’s grounds for an internal complaint and an AFCA escalation.

Can I still use my BNPL account during a hardship arrangement?

Usually no. Most BNPL providers will lock the account from new transactions while the variation is in place. The point of a hardship arrangement is to stabilise existing debt, not to extend new credit during a stressful period. Some providers reopen the account once the variation completes successfully; some require a fresh credit assessment first.

What if my BNPL hardship application is rejected?

The provider must give you reasons in writing. Lodge an internal complaint citing those reasons. If that doesn’t resolve it within 30 days, escalate to AFCA on 1800 931 678 or at afca.org.au. AFCA can order a variation if it finds the provider got it wrong. The service is free to consumers.

Is Afterpay regulated like other credit in Australia?

Yes, since 10 June 2025. The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 brought BNPL inside the NCCP Act as a new category of low-cost credit. Afterpay, Zip, Klarna and others now hold Australian Credit Licences and are AFCA members.

Can I get hardship help if I have multiple BNPL accounts?

Yes. Each provider must assess your hardship request independently, but you can lodge with all of them on the same day with the same evidence pack. If juggling several requests at once is unworkable, the National Debt Helpline (free) and a small number of regulated paid providers (including Hardship Hub) can coordinate the requests on your behalf. More questions like this on our FAQ.

Do I have to pay to get help with BNPL debt?

No. The National Debt Helpline (1800 007 007), Mob Strong Debt Help (1800 808 488), Way Forward Debt Solutions, and the Financial Rights Legal Centre all provide free help with BNPL and other consumer debt. Paid providers exist for cases where coordination across many creditors saves enough time and money to justify the fee — not for situations the free services can handle.

If you’re in this situation right now

Lodge your hardship request today, in writing, with whichever provider you’re behind on. The 21-day clock starts the moment they receive it. Then call the National Debt Helpline on 1800 007 007 if you’d like a free second opinion before you decide what comes next. If you have several creditors and you’d like a coordinated plan, talk to us — we’ll tell you honestly whether we’re the right fit.