SA Car loan debt owed and being pursued

[Rob Legat - SBPL]

It also costs money for a creditor to bankrupt someone. I’ve never done it, but I understand it’s in the order of at least $5,000. The only commercial reason to do it is if there is a suspicion the debtor is hiding assets/unable to liquify assets to pay towards the debt. It used to be that the threat of bankruptcy was enough to get people to act, but the perceived stigma of having been bankrupt is just not there anymore.

 

[settle]

Very true

 

[Clancy]

I heard that something like half of all millionaires have been bankrupted at some time in the past. However, i do not quite understand that? Because no finance company will go near you after that happens, so how these people get back on top i dont know? All i can think is that they must have been good at hiding assets, so then they can start again without the need for finance?

But, if you do negotiate a payment plan to avoid bankruptcy, please do insist any negative credit mark is to be removed, otherwise, what is the point?

I can tell you, after separating with my ex, she did not pay her credit card debt (which was also in my name) and it went to collection. Both of us were refusing to pay it until their was an agreed property settlement. We then negotiated the property settlement, and i have agreed to pay the credit card. However, i could not get finance to pay it because of the credit mark associated with it.

I had to negotiate with the debt recovery agency and got them to remove the credit mark so i could get the finance to pay it, and that worked, debt paid. Some debt recovery agencies are too stupid to remove the credit mark though, in which case your only options are negotiating a payment plan or bankruptcy.

 

[Rob Legat - SBPL]

There's an old saying on the Gold Coast (where I am) that you're not a real property developer until you've been bankrupted twice. There's also one that goes the easiest way to get to $1 million dollars around here is to start with $5 million...

As for removal of black marks, it's essentially illegal to do so unless it was listed in error. Removals are being done, but there is a requirement on credit providers and credit reporting bodies to ensure credit files are accurate and up to date. Removing a negative listing which accurately reflects the facts is a potential offence, subject to a civil penalty.

 

[DMLegal]

Very true, plus there tends to be some confusion surrounding involuntary administration of a Pty Ltd company and bankruptcy. The former, while by no means a 'gold star' on your file, is nowhere near as catastrophic as bankruptcy. This is particularly the case involving, as Rob points out, property developers and builders. The developers and business setup phoenix companies which enter administration to avoid paying creditors; they are not concerned with obtaining finance.

 

[Clancy]

As for removal of black marks, it's essentially illegal to do so unless it was listed in error. Removals are being done, but there is a requirement on credit providers and credit reporting bodies to ensure credit files are accurate and up to date. Removing a negative listing which accurately reflects the facts is a potential offence, subject to a civil penalty.

Wow, did not know that? However, in my case, i was not notified of the credit card debt going to collection in the first place. I told this to the collection agency and i also told them that because that happened, i was robbed of the opportunity to refinance before going to collection. They may have used this as the basis to justify removing the credit mark?

 

[Rob Legat - SBPL]

Very possibly, especially if it was in the last few years. The rules changed in 2014 which mandated the hoops that lenders need to jump through before a listing can be made. It's also when the penalty provisions came in - but it's been the case for a long time that the credit file must be accurate and up to date.

 

[Clancy]

Very possibly, especially if it was in the last few years. The rules changed in 2014 which mandated the hoops that lenders need to jump through before a listing can be made. It's also when the penalty provisions came in - but it's been the case for a long time that the credit file must be accurate and up to date.

Thanks for the info!