Released every month our debt collection blog contains news, stories and tips to keep you informed.
The NSW State Government has recently announced a new free online legal service to assist people who may be experiencing mortgage stress.
The LawAccess NSW website now provides 2 interactive guided pathways to match people with the information they may need to assist them in resolving issues surrounding mortgage stress or unpaid council rates with another 4 pathways on other topics to come online later this year.
Attorney General Mark Speakman said, "This service is arriving at a crucial time for families facing mortgage stress. The online pathways are convenient and easy to use, with users only needing to answer a few simple questions to get reliable legal information and practical solutions tailored to address their situation. For example, the mortgage stress pathways provide information on budgeting, seeking a ‘hardship variation’ to a loan and tips on avoiding ‘quick fix’ pitfalls that could ultimately cause greater financial pain."
The pathways are a new online resource which makes up part of the NSW Government's $24 million Civil Justice Action Plan which harnesses technology and innovation to make it faster and easier for people to navigate the Court system and resolve their legal issues. Other key aspects of the plan include:
- creating a $1 million Access to Justice Innovation Fund to encourage legal professionals, digital experts and community groups to develop ideas to improve the way legal problems are solved;
- allocating almost $20 million in new funds for community legal centres over the next 4 years;
- expanding the online Court services to allow more people to finalise their case from the convenience of their own PC;
- increasing the jurisdiction of the Local Court's Small Claims Division to hear disputes up to $20,000 (the current limit being $10,000); and
- introducing online guidelines to encourage local and State Government to resolve unpaid debts early including negotiating time to pay arrangements.
Learn more via the Guided Pathways site at LawAccess NSW.
Recent changes in NSW have extended the amount of to 7 working days for documents served by regular post (an increase from 4 working days). A working day is deemed to be a day that is not a weekend or a public holiday.
This change effects documents particular to NSW. It does not change Consumer Credit Notices (such as s88 default notices).
For example, some of the notices impacted include;
This article is not intended to be and does not constitute legal advice.
In our March 2018 edition we reported that Bundaberg Regional Council were auctioning several properties for outstanding rates. It appears that this trend is set to continue with Armidale Regional Council following in their footsteps.
The Armidale Express is reporting that council is set to auction 59 homes after owners have failed to pay their rates. Council is reporting that the 59 properties, which include vacant parcels of land, are valued at $748,300 which is roughly a quarter of the $2.455 million owing as at the end of June 2017. Outstanding rates vary with amounts owing to council between $2,391 to $75,811.
Chief Executive, Chris Rose, said in a statement to the media, "It is unfortunate council has to take this path. However, if council did not act to recoup the outstanding amounts, it would be unfair on ratepayers who pay their rates in full and on time. Property owners are advised to contact council if they are falling behind in paying rates. We can work out an agreeable payment plan or, in some cases, they can apply for hardship rate relief. Plus, rates can also be paid on a weekly, fortnightly or monthly basis via direct debit, rather than waiting until the quarterly bill."
All NSW councils are bound by the NSW Local Government Act that gives councils the power to sell occupied properties where rates have not been paid in more than 5 years and vacant land where the overdue rates exceed the current land valuation provided by the Valuer General.
The properties are set for auction at Armidale Town Hall on Friday, 14 September.
As is the usual practice this time of year we have received notification that several Courts will not be opened or will have limited staff over the Christmas / New Year period.
As of 18/12 notification has been received from the following States and Territories:
New South Wales
A majority of Registries will be closed from Monday, 25 December 2017 and will re-open Monday, 8 January 2018.
All Registries will be closed from Wednesday, 27 December 2017 and will re-open Monday, 8 January 2018.
Australian Capital Territory
All Registries will close from 4.30pm on Friday, 22 December 2017 and will re-open Tuesday, 2 January 2018.
Magistrates' Court Registries permanently staff during the Christmas / New Year period except for gazetted public holidays.
Supreme and District Court Registries closed from Friday, 22 December 2017 and will re-open on Tuesday, 2 January 2018.
Please remember that our office will also be closed over the Christmas and New Year period with us returning for business on Wednesday, 3 January 2018.
Following the residual impact of ex-tropical Cyclone Debbie on areas in the Northern Rivers of NSW region we are granting moratoriums to those in impacted areas.
Where possible we will attempt to assist our customers by providing the necessary moratoriums, payment extensions or alternate arrangements for payment. For those in impacted areas please only contact us when it is safe to do so.
We have had some situations of late where Garnishee Orders for Wages or Salary are being filed however the employer has been unable to comply with the Order as the Judgment Debtor is not earning over the Weekly Compensation amount.
This leads to a situation where deductions are not being made which means that deductions are not being made to reduce your debt.
s122 of the Civil Procedure Act states:
1. The amounts attached under one or more garnishee orders must not, in total, reduce the net weekly amount of any wage or salary received by the Judgment Debtor from the Garnishee to less than $447.70 as adjusted under Division 6 of Part 3 of the Workers Compensation Act 1987 .
1 (a). The amount of $447.70 referred to in subsection (1) is an
"adjustable amount" for the purposes of Division 6 of Part 3 of the Workers Compensation Act 1987 .
2. In this section:
"net weekly amount" , in relation to any wage or salary payable to a Judgment Debtor, means the amount payable each week to the Judgment Debtor after deducting any taxes or other sums that, pursuant to any Act (including any Commonwealth Act), are required to be deducted from any such money.
Effectively this means that the Judgment Debtor can retain an amount of $480.50 (effective from 01/04/2016).
Several options remain to you if the Judgment Debtor is not earning over the Weekly Compensation amount however for the purpose of this article we will only discuss 2 possible solutions.
The most obvious solution is to have the Judgment Debtor apply for an Instalment Order at the Local Court. This offer for payment by the Judgment Debtor removes the protections that they have under s122 of the Act and deductions must be made for the amount that the Instalment Order is made for.
Alternatively you may consider, if you have details of the financial institution that the Judgment Debtor banks with, the issue of a Garnishee Order for Debts. This Order attaches to any / all monies held in the Judgment Debtors bank account with that particular financial institution and is not subject to s122 of the Act.
If you need more information about enforcement of a Garnishee Order please contact us.
We often come across examples where requests are made to our office for the issue of Default Notices. Having reviewed the request we then find that the same debtors have been issued with the same Notices several times over the course of their loan.
Effectively as a Creditor you are teaching the debtor to pay upon receipt of the Default Notice and not as their Contract stipulates. The debtor will often make contact, make arrangements to clear the arrears however fall into arrears again. The next month you will be issuing another Default Notice, the debtor will contact and make an arrangement and the cycle continues. As a Creditor how can you end this cycle and take control of the account?
Under Section 94 of the National Consumer Credit Protection Act 2009 the debtor can propose an application, verbally or in writing, to postpone action under a Section 88 or Section 90 (i.e. they make an arrangement to clear the arrears). The application must be made by the debtor prior to the s88 or s90 Notice expiring.
As the Creditor you must respond to the request made by the debtor within 21 days of the application and advise of the decision, either accepting or declining the application, the name of their relevant EDR scheme and the debtors rights under the scheme.
What happens though if you wish to accept the debtors proposal but don't want to get caught in the cycle of issuing another Default Notice?
As a Creditor you can issue a Section 95 Notice of Postponement under the Act.
This Notice indicates to the debtor the conditions of the postponement and advises the debtor that the Creditor is not required to give any further Default Notice under the NCCP Act. The Notice however only applies to the debtor that originally negotiated the postponement and does not apply to other debtors, mortgagors or guarantors under the Contract unless these parties have consented to the negotiated postponement.
You can find out more about this service by contacting us.
The ANZ have announced today that a 12 month moratorium will be granted on the sale of farms in drought stricken areas in both Queensland and New South Wales.
The announcement builds on the existing support available to drought affected farms in Queensland and New South Wales and includes:
The current legislative framework does not provide a minimum amount that is retained by the debtor in order to live from. In a Court issued Bank Garnishee for the collection of a debt for a normal Creditor, there is a minimum amount that is preserved where Centrelink payments are paid into the debtors account.
The parliamentary committee noted that that "it received evidence indicating that the garnishee power of the SDRO can be exercised without proper regard to the subsistence nature of Centrelink payments".
There is concern that this power is causing extreme hardship to debtors who can least afford it, with the mechanism to have the funds returned not adequate.
It should also be noted that the current legislative environment provides the SDRO a natural advantage in the collection of debts over all non-government entities. The SDRO can suspend Drivers Licences, cancel car registrations, issue wage and bank Garnishee Orders all WITHOUT a Court Judgment.
This does not appear likely to change following the review.