DEBT collectors are telling broke families to eat less, quit smoking and live in cheaper homes as they recoup billions of dollars in unpaid bills.
Others are chasing money from the dead, bungling identities and abusing family and workmates in the pursuit of a growing pile of owed cash. Continue reading
THE International Monetary Fund has warned that the credit crunch will be deep and long-lasting, with the worst yet to come. Continue reading
THE average Australian lost $25,000 in wealth in the past year, the steepest fall on record. Continue reading
THE amount of tax paid by the average Australian has rocketed by up to 40 per cent in just five years. Continue reading
DESPERATE people are resorting to stealing food – a sign the failing economy is driving up crime.
New Bureau of Crime Statistics and Research figures released yesterday for NSW revealed shoplifting of food rose 17 per cent last year, with almost two cases reported to police every day. Continue reading
SMALL business owners on the brink of defaulting need to be careful not to lose the lot if they go belly-up.
Roger Mendelson, chief executive of Australia’s largest debt collector Prushka, warns people to consider spreading their banking around.
“If you have a loan from a bank, don’t have your credit card with the same bank,” says Mr Mendelson, a commercial lawyer with 25 years’ experience.
“You may have partners and your business loan goes into default or the bank may ask you to repay the principal, then that triggers a default with any credit cards you may have at the same bank.
“Normally the bank will insist you repay the credit card at the same time.
“My other advice for SMEs is if you have a loan and some savings on deposit, then it’s better to keep your savings at another bank. If the bank demands you repay your business loan they have a right to take your savings too without asking and apply the proceeds to your loan.
“It happens, I’ve seen it a lot, so spread your banking around a bit.”
He says people don’t understand the power of the banks over defaulting borrowers and are often shocked by how far lenders can go to recoup their loans. “If a borrower has multiple loans with the same lender, any assets connected to those loans can usually be used as security to cover defaults on other loans,” he says.
“So avoid taking out multiple loans with the one lender.
“Borrowers with debts from different sources such as credit cards, personal loans or car loans should consider consolidating their debts on to their home loan to reduce interest costs and monthly repayment rates.
From the time most loans go into default they are subject to interest at a prescribed higher rate, usually 3-5 per cent higher than the existing rate.
Mr Mendelson says borrowers should realise the power in a loan agreement is heavily weighted on the side of the lender.
He also says most non-deposit-taking lenders are uncompetitive in the current market.
“They are not writing new business and are only managing their loan book.
“As they no longer need to compete with other lenders there is little incentive to pass reductions in rates on to borrowers.”
news.com.au article
AUSTRALIA’S economy is set to keep contracting to a recession, with the rate of growth at a 26-year low in a leading survey. Continue reading
Qantas will slash up to 1750 jobs, ground 10 aircraft and defer delivery of superjumbo A380s and other aircraft in a desperate attempt to steer its way through the worst aviation downturn in years.
The airline has also slashed its profit forecasts by as much as 80% because of a rapid deterioration in trading conditions in recent weeks. Continue reading
AUSTRALIA’S car industry will not survive the economic recession, and Holden will probably be the first to go, an industry expert says. Continue reading
MORTGAGE lenders are slashing loan ratios in a bid to protect themselves against falling house prices.
Commonwealth Bank, Bankwest, ING, Challenger, Citibank and Suncorp have all cut their maximum loans from 95 per cent to 90 per cent of the property value – and may cut further. Continue reading
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