Having problems with finance
There could be solutions
There is nothing worse than running into problems with finance.
These problems with finance could be because you are falling behind with your existing loan repayments or perhaps you have a default from a mistake that you made a few years ago that has caught up with you but regardless of what the reason is, the most important point is that there may be solutions.
This is also the case if you are in the position where you feel like you are sinking in debt or, even more frustrating, you have equity in your home but can’t get access to it because lenders that you have approached don’t like the the reason that you need funds. A classic example is the limited number that will let you borrow to pay out a Tax Debt to the Australian Taxation Office, working capital or business use. This is likely to become an even bigger issue in the future as the ATO continues to increase its focus on compliance and outstanding debts but, once again, there may be answers.
Many people experience problems with finance because of issues with their credit history which can be a problem when trying to get a home loan. Don’t despair. There are avenues available although they may not always be the ideal loan. This is a time when you really need expert advice.
Home Loan Arrears
Many clients having problems with finance find themselves juggling multiple loans and credit cards and feeling that they may never be able to get on top of things.
Late repayments and going over your limit on credit cards is a red flag to lenders and there may be difficulties in refinancing these loans to consolidate debt.
You can be very much misled by a lender who “allows” you to call and say that your repayment will be late. They appear to say that this is acceptable however if it is a continual issue, they would be very reluctant to help you out if you wanted to consolidate your debts as they would consider this a poor repayment history. Unfortunately you often find this out too late.
There can be many reasons why arrears occur including being over-committed, sickness or just losing your job. These may be a temporary issue which has been overcome but you can find yourself on a treadmill of never being able to catch up. The late payment fees and arrears interest just makes things worse.
Consolidating debt can be the answer to this problem and help get you back on track.
A default on your credit report indicates that you have had an unpaid debt at some stage in the last five years. Once listed, a default remains on your credit report even after it has been paid.
Defaults should only be listed after an amount remains unpaid for more 90 days but if you feel that the default has been incorrectly listed, then there are avenues for disputing these defaults including complaints to the appropriate Ombudsman or the Office of Fair Trade.
There are various levels of defaults ranging from minor Telco and utility accounts, debts to financial institutions through to bankruptcy and depending on the overall strength of a loan application, the minor Telco & utility company defaults can often be overlooked as long.
The most important point is that the sooner that you pay any outstanding defaults after becoming aware of them, the better it looks for you.
Minor defaults with phone or electric companies are very common these days and the creditors use the system as a debt collection tool. They know that you can’t get any form of finance unless these have been paid and are happy to sit and wait until you make an application for finance, knowing that you will have to pay it.
Bankruptcy & Part IX
People make mistakes in their lives – after all, every one is human.
Sometimes, these can have very long lasting effects such as Bankruptcy and Part IX arrangements.
You will always need to declare your previous history and even though it may come off your credit file , your bankruptcy will forever be recorded on the National Personal Insolvency Index which some lenders check as a matter of course.
Being caught failing to disclose that you have been bankrupt will generally lead a lender to automatically declining a loan. This would also be the case if you owed a lender money when you were declared bankrupt.
As a general rule, loans for discharged bankrupts and Part IX arrangements are usually only available after a person has been discharged from their bankruptcy or Part IX arrangement for a period of 2 years. However, there are some lenders that are prepared to lend as soon as a person has been discharged and are also prepared to offer very competitive rates.
A decision that some borrowers make where only one person in a relationship has been subject to bankruptcy or a Part IX arrangement is that they borrow in the other persons name only. This avoids the problems of the bankruptcy but can only be done if the income of that person can support the whole loan.
Whatever the situation, we can help with a full assessment of your current financial position.
We can also help you find a lender if you have equity in your property but would like to access some of this equity to satisfy a Part IX debt.