A Mixed Week of New Clients

Its been a mixed week of various new clients. From the older couple who owe the ATO over $100,000 to the young divorcee who has about $60k in unsecured debts, and also a chartered accountant who lost money trading shares and options... our new clients come from all walks of life and all states.

We have also been talking to a married couple that tried to apply for a Part IX, but we're badly advised and their application was rejected because it wasn't completed correctly. A shame, but really also a blessing for them, in that they can avoid some of the prohibitive issues that Part IX's bring.

The one element they all have in common though, is they need professional help, and seeking that help is the
first smart step in their recovery process. They're on the way to getting their lives back, debt-free and cashed-up, and never to look at credit cards the same way again!

I'm looking forward to helping more people next week. I wonder what sort of life-stories they'll have?

Debt Free, Cashed Up and Laughing - The Cheapskates way to living the good life: Double check

Debt Free, Cashed Up and Laughing - The Cheapskates way to living the good life: Double check: "If you were to check your grocery or department store receipts regularly, chances are you will eventually find an overcharge. This happens..."

Solving Credit Card Debt Issues

Well it’s been a big week, saw two people in Melbourne and they have signed up to our unique debt negotiation service. One of them has 5 kids, and his income has just dropped by two-thirds!!

Help!

He is really struggling, and has over $100k of ATO debt on top of the $50k of credit card debts too.

Other strugglers spoken to this week include people who can’t re-finance their home to get some cash because they had a default already, and the banks don’t want to know about them, full-stop. We have a solution for that situation as well.

It all just takes some time, planning and then sticking to the game-plan and once you come out the other side you’re debt-free.

Wouldn’t that be great?!?

ANZ wipes pensioner's $18,600 credit card debt

19/08/2010

By ninemsn Money staff

The ANZ has agreed to wipe $18,600 in debt from a Victorian pensioner's credit card after steadily increasing his limit over the past nine years.

Alec Stubbs, a former wharfie from Yarawonga, has had his ANZ credit card limit increased to $46,000 since 1991.

"It's clear this customer's credit limit should not have been increased to this extent, and due to the exceptional circumstances we have decided to clear this debt to ensure his family is not placed under any additional stress at this time," ANZ spokesperson Stephen Ries told the Herald Sun.

Stubbs, 72, has been on a pension for several years and receives $485 a fortnight.

He also had a credit card with the Commonwealth Bank with the limit steadily climbed from $3,500 in 2003 to $25,000 in 2006.

CBA spokesperson Steve Batten said the bank had stopped unsolicited offers to welfare recipients from 2007, and those who requested extra credit had to pass a financial test according to the Herald Sun.

Stubbs’ wife Pauline only discovered that her husband was $36,000 in debt when she opened his mail while he was in hospital being treated for cancer.

"I nearly died," she said. "How in the hell could they think a pensioner could really afford this? We are not secret millionaires.

"Even if he asked for this, don't they check into people's circumstances before they throw money around?"

The husband and wife have kept separate banks accounts throughout their 53-year marriage and she wasn't aware of the minimum monthly payments running into hundreds of dollars.

His deteriorating health and confusion has left him unable to properly explain his finances according to the Herald Sun.

In August the federal government promised new measures that would mean credit card companies would not be allowed to increase credit limits without agreement from customers .

Good, bad and diabolical

Good, bad and diabolical
August 8, 2010 - SMH
There are different kinds of debt — but if you have the Very Bloody Bad variety, get rid of it.


YOU'VE probably heard about good debt and bad debt. Well, they should rightfully be called All Right Debt and Very Bloody Bad Debt.

The former is usually over assets that generate income and so earn tax deductions. It's "all right" because it potentially builds your wealth. VBBD, by contrast, actually drains your wealth potential.

Advertisement: Story continues belowWe're talking credit cards and personal loans. And yes, even your mortgage - although I'll get to why this is a special category.

With rates up - and probably headed higher yet - it's time to attack VBBD before it eats further into your future prosperity.

Credit cards and personal loans are the worst kind because they have the highest interest rates and are used for depreciating assets - in other words, those that will lose value over time. Or they are for experiences for which you'll have nothing to show afterwards, such as holidays.

Credit cards are priority No. 1. Not only are the rates typically the heftiest but the repayments also are often set so low you'll never pay them off.

A debt of $2000 on a card with a 17.65 per cent rate, a $59 annual fee that you add to the outstanding balance and a 1.5 per cent minimum repayment will in 25 years leave you with a debt of not $2000 but $3242. And you'll have paid almost $12,000 in interest.

Cannex calculates you'll still have debt in 25 years on cards with more than 16 per cent interest, a $24 annual fee and a minimum repayment of 2 per cent or less. This won't happen with a personal loan - repayments are set so you'll clear it in the agreed time. Such discipline can make them a better alternative.

The best way to eradicate credit card debt is to transfer your balance to a card that charges low or no interest for an introductory period and move heaven and earth to knock it off in that time. Don't use the card for any new spending - this is how the banks recoup their apparent generosity. Fresh debt will attract a high interest rate from day one and until you've cleared your entire transferred balance.

So what makes mortgages special VBBD? The fact they are over an asset, which is hopefully appreciating, so with any luck you'll end up paying out less by the end than your property is by then worth.

What's more, as with personal loans, the repayment schedule makes them a form of forced saving that can be a positive.

With - usually - lower rates than credit cards or personal loans, your home loan is the third debt to which you should turn your attention.

But remember that, as probably your biggest debt, your potential savings from early repayment are massive. Pay $100 extra a month on a $250,000, 25-year mortgage at 8 per cent and you'll save $53,000 (and more than three years); manage $500 and it jumps to $155,000 (and more than 10 years).

Beyond simply finding the cash, try these canny strategies.

Trick yourself into it by paying half your monthly repayments fortnightly. It sounds bizarre but because there are 12 months in a year but 26 rather than 24 fortnights, over the year you will make a whole extra - relatively painless - repayment.
Use every dollar twice by keeping and making savings into an offset account attached to the mortgage, so they are netted off your debt. You will save more in mortgage interest than you would make in a deposit account. And the fact that these are only "effective", rather than actual, earnings will mean no tax.
Get the bank to help by switching to a better deal. Even 0.5 percentage points will make a huge difference.

Use the rate rises as your incentive to bust out of debt far faster and a chunk cheaper.

ANZ wins damages from former employee

06 August 2010 – from Banking Day

ANZ National has won a ruling from the Employment Relations Authority for NZ$1.28 million recoverable from a former employee who caused losses to the bank by approving inflated mortgages as part of an elaborate scheme.

The employee, Zamir Hussein, worked as a mobile mortgage manager and was found liable for losses incurred by the bank in respect of 18 transactions where he recommended unconditional approval of mortgage applications. The borrowers then defaulted on those loans and their activities were referred to the Serious Fraud Office.

While ANZ’s actual damages exceeded NZ$1.28 million it decided to cap the claim at this amount based on the value of excess for which it would be liable under an insurance policy for such a loss.

In January this year, Hussein was ordered to pay NZ$54,000 and the current amount is in addition to that. The bank provided evidence on seven of the 18 transactions with three borrowers which resulted in a total loss of NZ$1.67 million to the bank. The loss resulted from the difference in the mortgage amount and the actual amount realised by the bank from mortgagee sales, plus costs related to the sales.

So many people are in debt-double-trouble.

Despite the looming federal election perhaps keeping some people at bay, it’s been another busy week, and we’re seeing the effects of some regional radio advertising trickle through in the form of fresh enquiries about our unique service.

So many people out there need our help, but many simply don’t know how to find us. Again this week we’ve had calls from people all over Australia looking for help out of their financial mess. Specifically we’ve had calls from all works of life: housewives in Sydney; business owners on the Gold Coast; and a young father in Adelaide (and his dad in Perth – just checking up on us).

Currently most calls for debt-relief help are from Western Sydney though, due to the ads we’re trialling on 2KA Country Music radio, and interestingly we’ve yet again proven the old radio adage that you need to be on-air over the long term to really generate a response. For the first few weeks we had no calls and though we had wasted our time and money, but that seems to be turning around now.

Many of the people I talk to have the same issues. They thought that debt problems wouldn’t happen to them, that they would be different and that they could avoid the interest rat-trap... but it’s the same for everyone, debt is a disaster! 

And borrowing more money to pay off debts is double-trouble! I see it every day. People get a consolidation loan, only to re-use their freshly zero-balance credit card instead of ripping it up, and before they know it there’s another ten or twenty thousand dollars added to their inescapable debt burden.

So many of the people we talk to are now buried under debt, they can’t remember the original purpose of working. It reminds me of the old line: “You should work to live, not live to work.” Meaning there is more to life than working yourself to the bone to be able to pay your debts and cover your family’s living expenses.

It really gives you food for thought!