Down under, a Record Number of Older Australians are in Financial Trouble.
Key Points
- The National Debt Helpline — a federal government-run financial counselling service — said it’s on track to receive a record number of cases through its call centers this year — many from older Australians who can’t meet their mortgage or rent payments.
- Many calls are from older Australians who can’t meet mortgage or rent payments.
- Counselors have started fielding calls from people struggling to switch to principal and interest mortgage payments.
Phones Never Stop Ringing
“The phones just never stop now,” financial counselor Greg said. “They’re just going day after day, after day. “You put the phone down, you pick the phone up again.”
I sat with Greg while he took some calls. One man who called in had lost his job, and the bank was on his back about meeting his repayments. Greg coached him through his options.
“Have you approached the lender in relation to a hardship arrangement, or have you approached the lender to talk about reducing your payments, putting payments on hold, until you get back into employment?” Greg asked.
Short Staffed
Karen Cox co-ordinates the Financial Rights Legal Center, which runs the call center.
“Call volumes are huge,” she said. “We’re at capacity in terms of the number of calls we can take, in fact we’re a bit short staffed at the moment.“
Ms. Cox said hundreds of thousands of Australians struggled with credit card and mortgage debt — the most she has seen in her career managing financial help call centers.
Salvation Army Hotline
In addition to the National Debt Hotline, the Salvation Army is flooded with calls.
The Salvation Army’s financial counselling service, Moneycare, warned it was at breaking point. In the 2017-18 financial year, Moneycare saw an 18 per cent increase in Australians seeking help.
The service has seen a big increase in the number of Australians over the age of 55 reaching out for help to deal with what it calls “severe debt“, which is debt at more than six times a person’s annual disposable income.
Need Help?
Australians who need help can contact the National Debt Helpline on phone at 1800 007 007.
Gee!
Gee who coulda possibly thunk this could happen?
Didn’t we hear that home prices only rose, and buying homes was a retirement plan.
It’s So Easy to Buy a Home
It was so easy that 13-year-old kids were buying homes. Flashback July 23, 2017: 13-Year-Old Kid Buys $552,000 Home
“Buying a house can be quite scary, especially when it’s your first purchase and renovation – there are so many things to think about.”
I suspect there is a bit more to think about now.
Related Articles
- Australia’s Housing Bubble Finally Popped?
- Mortgage Prisoners Totally Screwed in Australia as Refinance Rejections Soar
When the liquidity dries up, leveraged property buyers are royally screwed.
Mike “Mish” Shedlock
Look on the bright side… Australians can expect more jobs opportunities. Working for the government in financial counseling.
However, when they finally stop building houses and cars down there, the public-service sector will be the only significant employment opportunity left. Fortunately like Greece, where everyone is an employee of the government, it might take a couple of decades before the melt-down.
Let’s face it, after a half century of uncontrolled immigration from patronistic cultures within Italy, Greece, Asia and the cabals of pre-Thatcher UK unionism, how could the country not become some kind of broken socialist oligarchy.
Generally all loans in Australia are fully recourse.
From an old loan statement:
“You should understand that you may owe money to your credit provider even after the mortgaged property is sold.”
So you either have to pay any money still owing (including additional fees) or go bankrupt.
How easy and efficient is personal bankruptcy processes in Australia?
That is really about the most important aspect of a well ran economy. BK has to be quick and cheap to administer, so it doesn’t clog up during revaluations/downturns. AND, and this is hugely important, it has to be final. “One hour to one day per billion, and absolutely no way to reverse judgments no matter what” has to be the motto. Otherwise, you end up with every potentially productive asset frozen in limbo, while self righteous, zero-productivity yahoos waste productive people’s time quarreling over them, at the exact moments when economic actors need maximum certainty in order to risk moving forward.
This used to be a big plus for the US. You could take a chance, and if it failed, you lost everything but were then clear. And could try again. Instead of spending the rest of your life trying to avoid doing anything remunerative, since what ever you got paid, would just get garnished anyway, the way Europe has traditionally been. Or, even worse, spend the rest of your days in debtors prison, on taxpayers dime, like in parts of the Middle East.
In Australia, I believe are personal property loans are full recourse. Business loans are another matter. Hopefully, someone from down under will clarify. Regardless, what cannot be paid, won’t but the debt will hang forever. That’s my understanding.
It depends on how you set your business up. Australia’s way of doing business would make your U.S. SEC department spin. There is an Australian equivalent of the SEC – ASIC (largely toothless).
Loans are generally recourse except if you declare bankruptcy.
If you owe money to the Tax department – that’s a different story.
Ross Kay is advising not to buy real estate in Canada and the US.
I have advised that for the past few years. I have a problem with buying any market at a peak and especially one which Is not highly liquid.
Question #1. “Can you explain what a full recourse loan is?”
Question #2. “What assets can I hide in bankruptcy?”
“After me, the deluge…”