In Australia, there are currently over 14.7 million credit cards in circulation. Credit cards come with pros but unfortunately a lot of cons as well. Credit card debt is one of the biggest causes of financial stress in this country. The effects caused can be devastating to individuals, families and small business. 

​The changes to the Code will make banking products easier to understand and more customer-focused, to better meet community standards and expectations. 
Here's a snapshot of what has changed.

Our thoughts and prayers go to all of those who have been affected by the Australian Bushfires. It is a challenging time for all of the victims. We wish to extend our services at no charge to help those who have been directly impacted by the bushfires. There is a mammoth task ahead rebuilding; restoring confidence and preserving all that we hold sacred. We want to help. 
Here are some helpful resources.

• Department of Human Services 
  Human Services offer support to those affected by the bushfires with financial assistance.
  Visit www.humanservices.gov.au
• DisasterAssist
  Australia’s federal and state governments offer a range of disaster assistance packages for residents and businesses affected by the bushfires.
  Visit www.disasterassist.gov.au

• Insurance Council of Australia 
  The risk and disaster response team assists communities, governments, and insurers manage disaster response and community recoveries. 
  ​Visit disasters.org.au

​

​For many victims of financial disputes, it can be a daunting process to navigate recovering your funds. You may have tried to resolve the issue with the financial provider and have had no response or success.
​
Where do you go next? 
The Australian Financial Complaints Authority (AFCA) is a non-government dispute resolution organisation providing free, fair and independent help with disputes between consumers and financial providers. It is compulsory for all Australian Financial Services Licence and Australian Credit Licence providers to be members of AFCA. To have a complaint considered by AFCA it has to be within six years after you first became aware of the loss. With an exception of the current one-year window to consider complaints dating back to 1 January 2008. AFCA is only allowed to accept legacy complaints until 30 June 2020. 

At the SR Group, we understand the experience of being forced into bankruptcy is highly stressful for people. It involves court proceedings, substantial costs, the need for legal advice and very often the fear of losing the family home. A person can be bankrupted on a debt as little as $5,000. This amount can balloon to many thousands after legal costs and fees are added. The following example is from the casework of Consumer Action Law Centre and involved a client who had an initial credit card debt of around $5,000. The amount outstanding 18 months after the forced bankruptcy was around $60,000. This how the debt can accumulate:

​This can mean that a small credit card debt could lead to the loss of the family home. Many people being made bankrupt are in financial hardship and could make a repayment arrangement to pay their debts if given the opportunity. Forced bankruptcy should be a last resort. SR Group seeks to avoid this burden for our clients. Constructively working with people in financial hardship gives them an opportunity to repay their debts. Extra time can mean the person is able to improve their financial position, for example, to recover from an illness or get back to work. In October 2018 alone, there were 265 filings for bankruptcy in total. The biggest percentage of filings involved individuals and various companies suing over debts. The next largest percentage of filings is the Australian Taxation Office (15%), followed by publicly listed debt collector, Lion Finance (12%), and then various corporate bodies (strata plans/owners corporations) (12%). 
​

SR Group achieves success with creditors through lump-sum settlements, mediation and negotiation.

BACKGROUND
​We provided advisory services to the director of a company that provided financial solutions to businesses who sold small ticket items. Our client’s company had operated successfully for several years before a combination of environmental and market conditions caused a significant downturn in revenue. After numerous attempts to revitalise the business and diversify, and in keeping with his directorship duties, our client made the decision to wind up his company and appoint a liquidator.
After appointing the liquidator, our client found employment in a managerial role in a different company. While, the salary of the new role covered his living expenses, it did not leave enough money for him to meet his monthly creditor repayments, which were in substantial arrears. However, our client did not want to abrogate his personal creditor responsibilities and take the personal insolvency route.
​
ACTIONS TAKEN TO ASSIST & OUR RESULT
​We acted on behalf of our client in aiming to settle each of his eight debt collectors (St. George, ANZ, Visa, NAB, Westpac, Prospa, Baycorp, Citibank) for the lowest possible amount on the grounds of financial hardship. A family member of our client generously offered a small pool of funds to help settle his creditors. Overall, we were able to reduce our client’s debt from $261,000 to $84,000, a reduction of 68%. Our client now only had to pay 32 cents in the dollar, which he had to do immediately upon receipt of each offer in the form of a discount lump-sum settlement. 

​The most prolific user of the bankruptcy system is the Australian Taxation Office (ATO), which applied to make 543 people bankrupt in the past financial year of 2018-19. This number, however, was significantly lower than in the past three financial years. In the 2015-16 financial year the ATO applied to the Federal Court to make 1,215 people bankrupt. This fell to 1,061 people in 2016-17. In 2017-18 that number had fallen further to 833.
SR Group helps assist clients with ATO issues through seeking:

• more time to pay tax debts without interest charge;
• tailored payment plans;
• remission of general interest charges;
• release from payment of certain taxes or penalties.

It must be noted that there is no explicit right to a repayment arrangement under the tax laws (except for those people in serious financial hardship).
The Commissioner of Taxation can release a person from a tax debt if making the payment would cause serious hardship. Serious hardship is defined as where the payment of a tax liability would result in a person being left without the means to afford basics such as food, clothing, medical supplies, accommodation or education. If the serious hardship standard is met (as determined by the ATO), then the person may be able to be released from all or part of the tax debt. Through our experience it must be noted that serious financial hardship can be a difficult standard to meet.
SR Group has a proven track record in negotiating with the ATO to reach a mutually agreeable resolve.

​BACKGROUND
An established travel agency established in 1998 incurred financial distress, due to ongoing family health issues over a 10-month period. This difficult period resulted in neglect of the business, which ultimately led to a winding up application from the Australian Taxation Office (ATO).
​
ACTIONS TAKEN TO ASSIST & OUR RESULT
On behalf of our client, we negotiated with the ATO through various correspondences and reached a settlement equivalent to 48% of the initial debt.
​We achieved a full remission of interest and penalties on the debt, as well as establishing a monthly payment plan over two years to settle the debt, allowing the client to effectively manage their cash flow as the business got back on its feet.
​
DIRECTOR'S TESTIMONIAL
​“I recently used the services of the SR Group and cannot recommend them highly enough. In particular I dealt with the Client Relations Manager Mandana Missaghi, her professionalism, diligence and empathy helped me through a particularly difficult situation. Mandana has a very understanding and positive attitude which I really appreciated through all our dealings. The SR Group thoroughly investigated my situation, guided me through the available options & then negotiated on my behalf to reach an agreeable solution. I cannot thank the SR Group enough for their assistance & advice.”

This report reviews the applications in the Federal Court of Australia to make people bankrupt over the past four financial years (2015-16, 2016-17, 2017-18 and 2018-19). The report was put together after financial counsellors and community lawyers noticed that some creditors regularly applied to bankrupt people while other creditors did not.
The experience of being forced into bankruptcy is highly stressful for people. It involves court proceedings, substantial costs, the need for legal advice and very often the fear of losing the family home.
There are two problems with the current system of bankrupting someone. First, legal and other costs are continually added throughout the process, making it less and less likely that the debtor will be able to make a repayment arrangement to stop being declared bankrupt.
Second, a person can be bankrupted on a debt as little as $5,000. This can mean that a small credit card debt could lead to the loss of the family home. Using bankruptcy as an enforcement mechanism is particularly problematic for people on low incomes who own their homes. It is poor public policy when people become homeless over relatively small debts.
Financial counsellors and community lawyers also report that many people being made bankrupt are in financial hardship and could make a repayment arrangement to pay their debts if given the opportunity. Given that some creditors are not using, or rarely using the bankruptcy process, while others use it extensively, it raises the question as to why there are such different practices.
This report aims to change the way creditors use bankruptcy as a way to enforce a debt. Forced bankruptcy should be a last resort.
SR Group assists many companies and individuals so that it does not end in bankruptcy.  
To view the report click here 

We are excited to announce we are moving office as of Monday 22 July 2019.
Our new office and postal address will be Suite 2 Level 10 52 Phillip Street Sydney.

2019-20 Federal Budget
Last week saw the first Federal Budget in the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Federal Government announced they will provide $606.7 million over five years in response to the Royal Commission:
Use of Funding Amount
$2.6 million - Designing and implementing an industry-funded compensation scheme of last resort (CSLR) for consumers and small businesses.
$2.8 million - Providing the Australian Financial Complaints Authority (AFCA) with additional funding to help establish a historical redress scheme to consider eligible financial complaints dating back to 1 January 2008.
$30.7 million - Paying compensation owed to consumers and small businesses from legacy unpaid external dispute resolution determinations.
$404.8 million - Resourcing the Australian Securities and Investments Commission (ASIC) to implement it new enforcement strategy and expand its capabilities and roles in accordance with the recommendations of the Royal Commission.
$145.0 million - Resourcing the Australian Prudential Regulation Authority (APRA) to strengthen its supervisory and enforcement activities which will support its response to key areas of concern raised by the Royal Commission, including with respect to governance, culture and remuneration.
$7.7 million - Establishing an independent financial regulator oversight authority, to assess and report on the effectiveness of ASIC and APRA in discharging their functions and meeting their statutory objectives.
$1.0 million - Undertaking a capability review of APRA, which will examine its effectiveness and efficiency in delivering its statutory mandate, as well as its capability to respond to the Royal Commission.
$11.2 million - Establishing a Financial Services Reform Implementation Taskforce within the Treasury to implement the government’s response to the Royal Commission, and co-ordinate reform efforts with APRA, ASIC and other agencies through an implementation steering committee.
$0.9 million - Providing the Office of Parliamentary Counsel with additional funding for the volume of the legislative drafting that will be required to implement the government’s response to the Royal Commission.