Advice Debt Legal

							Advocating your client out of
   debt – tips and traps

        Presentation to Legal Aid
 Kat Lane, Principal Solicitor – Consumer
     Credit Legal Centre (NSW) Inc
              6 August 2010
     Consumer Credit Legal Centre
               (CCLC)
• Credit and Debt Hotline & Insurance Law Service –
  telephone information, referral, financial counselling
  strategies and legal advice – over 15,000 calls last financial
  year
• Financial Counsellors and solicitors
• Casework including negotiations, written legal advice and
  representation in EDR schemes, courts and tribunals in
  credit, debt, banking & insurance
• Web-based resources for the public and other caseworkers
  www.cclcnsw.org.au
• Education resources, presentations and media
     Consumer Credit Legal Centre
               (CCLC)
• Credit and Debt Hotline & Insurance Law Service –
  telephone information, referral, financial counselling
  strategies and legal advice – over 15,000 calls last financial
  year
• Financial Counsellors and solicitors
• Casework including negotiations, written legal advice and
  representation in EDR schemes, courts and tribunals in
  credit, debt, banking & insurance
• Web-based resources for the public and other caseworkers
  www.cclcnsw.org.au
• Education resources, presentations and media
            The art of referral
• If there is joint debt and potential financial
  hardship need to give detailed referrals
• Need to keep a list of credit and debt referral
  information handy
• The best referral is a detailed referral about
  what to ask and the outcome they need to
  look for
 The family lawyer referral toolkit
Useful contacts
• Free financial counsellor – 1800 808 488
• Urgent credit and debt legal advice – 1800 808
  488
• Legal advice – Legal Aid and Consumer Credit
  Legal Centre
• Financial Ombudsman Service 1300 780808
  www.fos.org.au
• Credit Ombudsman Service www.cosl.com.au.
 Managing debts after separation
• Refer for legal advice on the existing debts if
  you think there may be a defence:
  – There may be a defence
  – Advice on how to negotiate
  – Delaying tactics to get time to negotiate or sell
  – Practical strategies
                What to ask
• Has the client received a default notice?
• Has the client received a statement of claim?
• What is the plan on how to pay the debt?
• Will the financial hardship be ongoing for the
  foreseeable future?
• Is any of the debt relationship debt? That is,
  debt where they did not receive a benefit and
  was for the benefit of the ex partner.
    Statements of claim on loans
• Always tell the client to consider filing in FOS
  or COSL immediately
• Must be filed before the lender gets
  judgment.
• Lender has 28 days from the date the
  statement of claim is served to apply for
  judgment. Lenders sometimes take more than
  28 days to apply for the judgment.
      Statements of claim cont.
• Lodging in EDR will mean:
  – The lender cannot get judgment until the matter is
    determined in EDR
  – A chance to make a repayment arrangement
  – Argue costs on Statement of Claim
  – Ask for Statement of Claim to be discontinued
                 Joint debts
• Unless there is a court order binding the credit
  provider – joint liability continues
• The joint debtor who is not paying the debt
  needs to:
  – Have separate statements and notices sent to
    their new address
  – Get advice if there is a default
                   Hardship
• Separation and family breakdown is a cause of
  financial hardship
• If there is financial hardship the process is:
  Step 1 – ask for a repayment arrangement from the
            lender
  Step 2 – no response they say no or legal action is
            threatened go to FOS or COSL
  Step 3 – argue for a repayment arrangement in FOS
            or COSL
                  Hardship
• EDR can be used to have hardship decisions
  reviewed and determined
• While the hardship request is in EDR then the
  lender cannot take further action or
  commence action
• EDR disputes can be filed anytime before
  judgment
• EDR is a useful tool to get time to negotiate
  and time for your client to get advice!
     Family breakdown and bank
               policies
• Clause 38 of the Code of banking Practice
  requires banks to publish guidelines setting
  out how they will deal with:
  – Applications for transfers of mortgage pursuant to
    Family Court determinations; and
  – Otherwise enforce debts affected by family law
    settlements
    Financial Counsellors
• Money plans & general money management
• Negotiation with creditors including making
  repayment arrangements
• Assisting consumers to make hardship
  variations
• Discussing options for dealing with debt
• Discussing bankruptcy and giving assistance
  with filling out forms to go bankrupt
• Referring for legal advice
• Complaints to EDR schemes (some)
           Credit and Debt Hotline
Call the Credit and Debt Hotline for urgent advice or for
  a referral to a financial counsellor near you:

                  1800 808 488
CCLC solicitors can also give legal advice in relation to problems
  with:
• Car loans
• Credit cards
• Home loans
• Personal loans
• Credit reports
• Direct debit problems
• Unauthorised transactions on your bank or credit card
  account
                     CCLC Website
                  http://cclcnsw.org.au

• Fact sheets in Arabic, Chinese, Samoan, Spanish, Vietnamese,
  Bahasa Indonesia on:

    - Need a Loan?                      - Struggling with a debt?
    - Easy Money or Debt Trap? - Dealing with debt collectors
    - Family Breakdown and Debt         - Refinancing

• Arabic Radio Project – Audio Files
• More extensive Fact sheets and Sample Letters in English