The Australian Securities and Investments Commission has told lenders it expects them to be flexible with borrowers applying for hardship relief.Amendments to the National Consumer Credit Protection Act, which took effect in March, set out a rigid time-frame for hardship applications, but ASIC's guidance note on the issue, which was published last week, recommends that lenders exercise discretion.The new provisions change the way borrowers can notify lenders that they are in hardship; change the timing for default notices; and impose big fines for non-compliance.If debtors can't meet their obligations under a credit contract they may give notice of their inability to meet these obligations. This hardship notice can be either in oral or written form, which makes it easier for borrowers to apply for relief.Once a lender has received a hardship notice it has 21 days in which to respond with details of how it might change the credit contract.Within that 21-day period the lender may also issue an information notice seeking further information from the borrower. The borrower then has a further 21 days in which to respond.If the borrower does not provide the requested information, the lender then has 28 days from the date of the request to make a response. If the borrower does provide the information requested, the lender has 21 days from when the information was received to respond.ASIC's guidance note says: "There may be circumstances where it is appropriate to allow for flexibility in meeting the obligations. Where a debtor shows a willingness to comply with a request but is not able to meet the timeframe, we are of the view that a credit provider may exercise their discretion to wait until all the information is received."However, it warns that "an unreasonable delay may exist where it is clear that no further information is likely to be forthcoming, and the continuing delay is likely to operate to the detriment of the debtor."An unreasonable delay may constitute unconscionable conduct.