Published: June 17, 2026

Practical tips for negotiating waivers

This information is designed to help frontline workers understand financial hardship waivers and how to support community members in requesting them. 

What is financial hardship?

A community member is in financial hardship when they are willing but unable to meet everyday living costs and debt repayments. It may be due to low income, illness, unemployment, family breakdown, or unexpected events such as domestic violence. 

What is a debt waiver? 

A debt waiver is when a creditor or debt collection agency formally agrees to forgive part or all of a debt.

A creditor or debt collection agency may agree to waive all or part of an alleged debt if the cost to recover the debt is more than they are likely to recover. Debt collection and legal action can be costly, and there are limits on what a creditor can do to force repayment. For example, a person’s Centrelink income and essential household items are protected from enforcement.

If a company concludes that the cost of pursuing the debt outweighs the amount they are likely to recover, they may decide to write off or waive all or part of a debt.

When to consider requesting a waiver

A debt waiver may be the best outcome for a community member who is unable to pay anything towards a debt while also paying their basic living expenses, and where this is unlikely to change while the debt is legally enforceable.

People on low incomes or government benefits who do not own assets of significant financial value are sometimes described as ‘judgment proof’. This means that even if a company obtains a court judgment, it may not be able to enforce it because the person’s financial circumstances offer no realistic avenue for recovery.

A waiver may not be an appropriate or achievable outcome for a community member that has a higher income, owns assets (like property, cars or shares), or is only experiencing temporary hardship.

If the debt is secured against property, the creditor is unlikely to agree to a waiver. A secured debt allows the creditor to take and sell the secured asset to recover the amount owed.

What to include in a waiver request

A strong waiver request should give the company enough information to understand why the debt should be waived and why further collection is not practical, fair or cost effective.

The exact contents of each request will depend on a community members circumstance. However, the below information can guide what you may want to include:

• Identifying details: the community member’s name, date of birth, account number or reference so the company can identify the debt.
• What are you requesting: if you are requesting a waiver, clearly state upfront that you are asking for the debt to be waived or written off due to financial hardship.
• Details of the community member’s experience of personal hardship: details of the difficulty experienced by the community member help the creditor to understand both that the person cannot repay the loan and that this is unlikely to change. Be direct and factual. Focus on experiences that impact on the community member’s ability to pay the alleged debt.
• Information about the community members financial hardship: Details about their income, essential expenses, and lack of assets. Some creditors will ask you to provide a Statement of Financial Position. You may also want to explain how long the person has been experiencing hardship, the impact the hardship is having on their health, and any experience that makes it difficult for the person to improve their financial well-being.
• Judgment proof circumstances: if the community member is judgment proof, explain that they have no assets of financial value, rely on Centrelink or are on a limited income, or own only protected household items. This shows that enforcement action would not recover funds. You can also note that continued collection or legal action would likely cost more than the amount recoverable, making a waiver commercially sensible.
• Request for written confirmation: ask the creditor to confirm in writing that the alleged debt is waived and that collection activity will stop.

A creditor is less likely to agree to waive a debt if they think a person’s circumstances may improve. Any information you provide should address both the community member’s current hardship and why this is unlikely to change during the time the creditor has to enforce the debt.

If you have concerns with the debt (for example, the community member experienced economic abuse), if can also be worth mentioning this in your request.

Possible outcomes of a debt waiver request 

• Full waiver: The entire debt is forgiven. 

• Partial waiver / negotiated settlement: The creditor agrees to accept a reduced lump sum payment (e.g. $200 on a $1000 debt). Please note this still may not be a realistic outcome for the community member if they have no capacity to repay. 

• Refusal: Some creditors may refuse, but others will negotiate. 

Note: Many providers (especially banks and utilities) also have domestic violence policies that allow debts to be waived or reduced where family violence has contributed to the hardship.