Solutions start early with debt

Best to find solutions before you start borrowing.

One is to read the loan contract very carefully. This is far more important than most borrowers realise.

See what has been said on www.gbac.com.au

If it is too late for that sort of solution then it is time to develop new strategies. That means reading up what is available.

If you need assistance you might wish to email greg@gbac.com.au.

Debt problems are best handled by fast action. It can be expensive to stick your head in the sand and hpe it will go away because it rarely does.

 

 

Why do proceeds of crime go to government???

Sydney Morning Herald reported today that the government received or would receive $17 million in fines from financial advice business Financial Circle for the damage it caused its clients by operating as it did. It is worth reading the article

What about all those poor people who were just looking for simple debt solutions. They knew little about finance, just wanted loans and according to the Herald were relieved on their money instead of having their loan problems solved.

Why do we see the Government $17m richer for apparently letting a business behave dishonestly, while the people who were taken down get nothing?

We saw this with the government that allowed banks and insurance companies to rob their customers blind for well over a decade, then collecting a reward of millions of dollars in fines from those banks and insurers.

GBAC has worked for over 40 years with many businesses and farmers to ensure that they can get sensible, fair  assistance.

Would you support laws that instead provide mandatory compensation  (not just refunds for amounts fraudulently taken) payable by offenders to those who lost their money. Email greg@gbac.com.au with your views.

Farmers are highly skilled at producing and judging a good animal, fleece or crop. They need to be able to produce a good credit rating too.

Credit ratings can cause bank abuse and be incorrect as the GFC revealed. We might ask “why is Equifax which was reportedly fined $3.5m for deceptive and unconscionable conduct allowed to continue trading after charging consumers illegally for their own credit record?”. Advocates like FairGO can help consumers who are over charged by the financial services industry. It is not necessarily easy or fast, but it can be done just like with stock and crops – by doing what is necessary to achieve it.
Surely the federal and state governments should not be making small fortunes in fines by allowing dishonest behaviour in the finance industry as it has for years. Instead it should be cancelling the licences to operate so that the dishonest operators are removed from the industry. The fines are chicken feed compared to the profits they are dishonestly making out of consumers. Borrowers ultimately pay people like Equifax, because the credit agencies charge lenders and the lenders include those costs in the charge to borrowers.

Given the dishonest behaviour by governments and the finance industry, the best thing borrowers can do is reduce their reliance on debt. Debt mortgages their future, that few can know in advance.

Borrowers being hassled by banks can obtain assistance from financial counsellors who receive funding from the government and at least one bank or from one of the many independent loan consultants. GBAC reckons that borrowers earn in interest saved or in discounts on debt about 10 times what they invest in having GBAC take on the bank for them. That is a 1,000% return on investment. It is hard to get that from farming.

Good credit rating pays well but taking on the bank can pay better

Credit ratings can cause bank abuse and be incorrect as the GFC revealed. We might ask “why is Equifax which was reportedly fined $3.5m for deceptive and unconscionable conduct allowed to continue trading after charging consumers illegally for their own credit record?”.

Surely the federal and state governments should not be making small fortunes in fines by allowing dishonest behaviour in the finance industry as it has for years. Instead it should be cancelling the licences to operate so that the dishonest operators are removed from the industry. The fines are chicken feed compared to the profits they are dishonestly making out of consumers. Borrowers ultimately pay people like Equifax, because the credit agencies charge lenders and the lenders include those costs in the charge to borrowers.

Given the dishonest behaviour by governments and the finance industry, the best thing borrowers can do is reduce their reliance on debt which mortgages their future, that few can know in advance.

Borrowers being hassled by banks can obtain assistance from financial counsellors who receive funding from the government and at least one bank or from one of the many independent loan consultants like GBAC that reckons borrowers may earn in debt write downs about 10 times what they invest in having GBAC take on the bank for them. That is a 1,000% return on investment. It is hard to get that from farming.

Make the effort and make the money!

It’s not just better rates that you get from bargaining. It can produce big debt write offs. For many borrowers in family businesses or farms carrying big debt, the bank makes more out of the business than the owners. That is because the bank puts a lot of time and effort into making money out of its customers. Every business does that, but moneylenders do it better than most because they pay attention to every cent.

If you make the effort to manage your finances well, you will make the money too. It makes sense to live your life in a way that will make you at least moderately wealthy.

The BankBid service enables you to extract good interest rates from your bank and other banks. It is always prudent to bank with a number of banks. Then you can choose the best one for whatever you are doing, after playing one off against the other. This system for a modest fixed fee was started in 1987 as Moneygrams by a Chartered Accountant who specialised in debt issues after banks were deregulated. It has saved many bank customers a lot of money over the years.

Preparing good loan applications is another thing that consultancy does today. The royal commission has revealed that the standard “Tick the box” applications are not sufficient for the individual circumstances of each borrower to be properly assessed. For that reason borrowers can also retain a low cost debt consultant to coach them in managing their debt for the highest profit.

Once debt gets out of hand there are numerous good solutions. One of the best is to negotiate a settlement with the bank. There are many factors in negotiating these agreements but the most important one is to have bargaining chips up your sleeve. That is one reason why a good debt consultant with accounting qualifications and business/farming experience pays off.

10 Steps towards achieving the right debt solutions for you

  1. Review and analyse the debt situation that has existed since the debt was first taken out
  2. Review your situation now to understand what would be the most and least desirable outcomes.
  3. Ascertain exactly why the current problem has arisen
  4. Examine each of the possible courses of action and document their ramifications
  5. Discuss all options in detail with you to ascertain your preferences
  6. Discuss the situation with the lenders to determine what they want
  7. Prepare detailed financial estimates of future operations
  8. Determine current security values
  9. Confer again with you to obtain your instructions as to your preferred options
  10. Work with you towards achieving the best possible financial outcomes.

Good results do not come easily but sometimes they make you more money than years of work.