The way forward for borrowers going backwards

Unsecured loan defaults

There is a new organisation called wayforward.org formed to assist unsecured bank borrowers manage bank loans with which they are having trouble. It’s CEO is a former big 4 bank executive and half its Board of Directors comprises big 4 bankers. It acknowledges that it might be paid by the banks or financial institutions it helps, 20% of what it helps the banks collect from borrowers. So you know which side it is on!

It sounds like the banks’ own commission-based debt collector. For many people in distress with loans it will help them make all the payments. That might mean extending the loan term and that will be a good idea. If interest has to be paid during that period it will still be a good Idea. It is a worthwhile initiative but it probably will not address wrongs by the bank, anymore than APRA, AFCA or ASIC do.

Changing banks

Banking has become much more competitive now. For the 20+ years of bank deregulation many bank customers have remained with their old bank and been given less than generous treatment. Many have been penalised for their loyalty. Today it is much easier to change banks with all permanent payments moved too, along with security documents. GBAC is introducing a new service in 2022 to enable borrowers to obtain better loans from banks. It will also assist borrowers to better manage their loans to avoid receivership or foreclosure problems, which are a lot more common than people think when applying for a loan.

Beating bank abuse

Bank deregulation in the 1980’s led to bank customer abuse of mortgage secured borrowers. For that reason GBAC gradually changed from a Chartered Accountancy firm offering accounting, tax, estate planning and audit services throughout Australia, to sorting out bank loan issues for mortgaged borrowers through mediation and negotiation. Originating in the Latin, the word “Mortgage” literally means “Death Pledge”. For many troubled borrowers it can feel very much like that.

Since de-regulation, GBAC has offered a comprehensive service to farm and business borrowers in every state and territory of Australia. The blame when loan problems arise is often directed towards the borrowers, blamed for not doing what they promised or taking on more debt than they could handle. However, GBAC has found that very often the fault sits squarely with the bankers. When that happens the bankers can often be persuaded to write off large amounts of debt, frequently including accumulated interest. They write off a lot more than 20%. GBAC’s best write off was 100% of a $650,000 business debt. It’s largest write off was $5 million written off a farm debt.

Strategic investigation, negotiation and persuasion

Not only is GBAC the seat of very solid investigative accounting, but it is skilled in research and has a very powerful secret weapon to persuade banks to be fair to their customers. Some banks are more inclined to be fair than others.

Never let the bank get the better of you. Not from the moment you read its Letter of Offer. There are rogues in banking as in any other field of endeavour. They rob Australians of their health, their farms, their businesses and their homes, sometimes their families and even their lives. They don’t earn more in a month than the Prime Minister does in a year, for nothing. But the borrower who remains in charge at all times and heeds the GBAC formula will mostly come out very well. GBAC does not receive any payment of any kind from the bank. It aims to earn its clients a profit of around 10 times what it charges them.

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