Our client was recommended a strategy by her financial advisor to refinance her home and obtain additional funds to invest for the future. The financial firm issued our client with new loans comprising a home loan and multiple investment loans. Our client alleged that the loan repayments were beyond her means and that the financial firm did not fulfil its obligations when assessing the borrower’s ability to service the loans.
Actions Taken to Assist & Result Achieved
We investigated the loans' serviceability and found our client had not been able to service the loans on her income capacity. We compiled a detailed submission to AFCA in regard to these claims. AFCA reviewed the submission and decided the financial firm were required to pay compensation for the interest accumulated on the home loan since 2008—resulting in a fair and successful outcome for our client.
With 2020 behind us, many businesses are now in recovery mode. This year will be one of budget repair for most businesses through developing long term strategies. Here are some issues all small to medium businesses should consider to ensure their survival.
1. Build client or customer relationships
A priority as once COVID-19 hit how many businesses have had the time to do this proactively? Cost-cutting, streamlining operations, implementing new health and safety procedures were the focus. It is now time to revisit customer relationships and how to support them for mutual benefit.
If your customer base has changed, focus on building new relationships to deliver repeat business in the future. Ask yourself what the real value of each customer and the cost to you is to get them.
New customers generally cost more to acquire than maintaining existing ones. However, this is sometimes not the case. You may spend more time and money serving low-value clients, and those precious resources would be better spent forming new relationships.
Our client came to us after losing her home and personal belongings in a fire. She held a building and contents insurance policy that was paid up to date at the time of the fire. Our client claimed fire damage to the property. The claim was referred to the insurer's investigation department for assessment. After the evaluation of the property, the insurer decided our client had not disclosed the condition of the property when taking out her policy.
The insurer declined the claim based on our client's nondisclosure. The insurer also cancelled the policy stating if our client had disclosed the relevant information would not be a risk.
Actions Taken to Assist & Result Achieved
Our team firstly evaluated the case and found the insurer did not provide a detailed and thorough process when our client applied for insurance initially. We put forth a comprehensive submission to AFCA. We argued the unsubstantiated refusal of the claim and our clients' loss. The insurer was directed to settle our client's claim for the contents and the house to be rebuilt. The insurer's cancellation of the policy based on nondisclosure was deemed incorrect and the policy reinstated.
We have seen a significant number of family-run businesses breakdown due to financial distress in the last twelve months. By the time a business is in financial distress, strained family relationships are often compounded further with money worries. If you're setting out to establish a business with family members, it is vital to recognise the inherent risks.
Our advisory team assists many people and companies in financial distress. Our unique expertise allows us to provide solutions across a wide range of financial distress issues that companies and individuals experience.
We negotiate daily with debt collection agencies and importantly understand both debtor and creditor's rights and obligations.
Debt collection agencies should be flexible in their approach. A flexible approach involves making meaningful and sustainable payment arrangements that reasonably consider a debtor's ongoing living expenses. The ACCC and ASIC have produced a debt collection guideline for debtors and creditors, which encourages flexibility on the part of both parties. The guide includes recognising debtors who are vulnerable and experiencing financial hardship and appreciating that debtors may have several debts owing to different parties. If you have to deal with a debt collection agency on your own, be sure to reference this guide.
Another helpful resource to access if you are comfortable dealing with a debt collection agency on your own is visiting the AFCA Datacube. The AFCA Datacube shows you the number of complaints against a debt collection company over the last twelve months.
If you have any questions or need assistance, our team offer a cost-free consultation and can be contacted on 02 8304 9300.
A credit score is used by financial lenders to decide whether to give you credit or lend you money. Your credit score is based on personal and financial information about you and is part of your credit report.
Credit reports include the following:
Debt consolidation through refinancing can be a sensible solution if you are experiencing financial difficulty. It is often more manageable to pay one monthly payment at a reduced interest rather than numerous facilities at various rates.
When deciding whether to go ahead with this method of debt consolidation, you should be aware of the areas to check before proceeding:
Susie Barnett established SR Group over a decade ago in Australia. With the success of our business in Australia, we are thrilled to be expanding our team in New Zealand. We are a dedicated team that helps people confronted with financial distress and victims of financial impropriety.
If you’re in financial distress, you’re not alone. We have helped many people negotiate with creditors over the last nine years, achieving positive outcomes allowing our clients to gain back control of their financial future.
When we first meet, we listen - Here are some of our clients frequently asked questions:
Why should you act quickly when you can’t pay your creditors?
Financial distress situations can be incredibly overwhelming, with many choosing to put their head in the sand and ignore the issue. Ignoring the problem usually only acts to exacerbate, and unsympathetic creditors tend to respond aggressively. The consequences of avoidance are generally detrimental and can lead to bankruptcy.
We work quickly and transparently to minimise your financial distress, giving you breathing space while we develop a workable strategy to get you back in a sound financial position.
What type of creditors do you negotiate?
We negotiate with a broad range of creditors, including:
What will the likely outcome be to help me (or my business) get back on my feet?
Depending on your situation, our strategy, and the negotiation process, the outcomes we seek are:
Why should I use a professional advisory team?
Our unique expertise allows us to provide solutions across a wide range of financial issues in a cost-effective manner. Our team are specialists in accounting, debt negotiation and restructuring. We approach each financial distress situation in a thoughtful and caring way.
We are here to help and can be contacted on (02) 8304 9302 for a confidential cost and obligation free discussion.
In Australia, financial counselling is a free and confidential service provided by community organisations, community legal aid and some government agencies. It is an essential service for over 125,000 people each year experiencing financial distress. Financial counsellors are skilled in listening to problems when an individual's judgement and clarity may be distorted. What people need is non-judgemental and confidential advice plus a workable plan to improve their financial distress situation.
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