Hey, guys. It’s Ben from Blackbox Finance. As most of you now know, we can help you out with all sorts of finance: mortgages, car loans, personal loans, business loans, whatever you need. What a lot of people don’t realize is we can help you out with bankruptcy debt or insolvency debt both before and after you declare bankrupt.
So, there’s a common misconception out there that, you know, I can be running a business, everything’s going great, paying the bills on top of that, blah, blah, blah. All of a sudden, something major happens, and I can no longer meet those commitments, so my only option is to declare bankruptcy. And that’s not actually the truth of the matter.
We work with a couple of insolvency specialists that can help you out. They’ve got strategies, negotiation techniques, and tools that they can apply and act on your behalf to at least reduce the debt, extend the time that you have to pay the debt, and all of these other things around it.
I recently had a scenario which is probably one of the most challenging scenarios that I’ve ever had, and I was successful with. Personally, it’s gratifying because the results of that meant that my clients could keep their home, a house that they had lived in for the last eight or nine years, raised their children in that house, and were emotionally attached to the house and built up a whole heap of equity in the property, as well.
So that’s gotta be one of the first things that a bankruptcy trustee looks for, do you own any property in your name? And if you do, it’s probably the easiest cash grab for them to take possession of that property, sell it, and satisfy the debt owed to the creditors.
These guys were running their own business, and it happened really, really quickly. One day, perfectly fine. Not literally the very next day, but within a very short period of time, major industry change that they couldn’t see happening, so it was out of their control and probably about a once-in-a-lifetime event, and what it resulted in is they ended up declaring bankrupt, and all of a sudden, they owe about 15 creditors a total of $220,000 with no way of paying it.
So, as I said, there was a number of challenges, but we managed to overcome them all. We put in place some strategies to help us to do that, the first of which was the female applicant was only working a casual job. Now, most other banks, because the casual aren’t guaranteed hours, most of the banks want to see about two years’ worth of history, and what they’ll do is they’ll take the income, and they’ll average it across those two years, and that’s what you’ll use for servicing. Not the bank we went to. They let us use all of the income.
The male applicant, around about Christmas, five, six, seven months ago, was made redundant from his job. So, kudos to him, he didn’t sit on his backside, he went out there and he searched for another job, and when he couldn’t find one, he set up his own APN and he went out and he got a cleaning contract, he got some handyman work, and he got some money rolling through the door.
So, challenge was, he was only self-employed for four months at the time that we applied. Again, most other banks want to see you have a registered APN for at least two years, and they at least want to see one year’s worth of financials. Most banks want to see two. This guy had four months.
What we did there, he also had contracts in place with the people that were supplying him the work, so we were able to use that to verify that the income would keep coming in.
This one here’s a big no-no. So, whenever you’re refinancing your mortgage to another lender, they want to see the statement to prove that you’ve made your payments on time every time for at least the last six months. These guys were unfortunately in a position where they didn’t have a massive amount of cash because he was self-employed, and it took a while to get those contracts and stuff like that. They unfortunately missed a couple of mortgage repayments. So what that actually says to a bank is, if you can’t pay the mortgage there, how can we trust you to pay the mortgage with us? Fair enough.
They had also entered into a hardship arrangement with the bank. Now, if you don’t know what that is, basically, you can call the bank and say, “Hey, look, I’m having a really tough time. Do you reckon we can put my repayments off for a month or two? Let me get back on top of it.” And they will give you what’s called a hardship agreement. I think that’s a good thing, because I think that means you’re proactive, you’re actually talking to your creditors and you’re taking steps to work it out, and you’re being responsible with your spending.
Banks, on the other hand, although they’re the ones that give the hardship agreement, see it as a negative thing. It is what it is.
So they owed about $300,000 on their current mortgage. In addition to that, they had a $30,000 personal loan. I had to wrap that $30,000 personal loan up into the debt, as well, because the repayment on the debt loan, that is generally somewhere between $700 and $900 a month, so to have that money walking out the door before you’ve even paid the mortgage is a big undertaking, and hard to manage.
So we had a total debt between these three of $550,000. So we go to the bankruptcy trustee, and I say, “I believe I can work this out for them.” Naturally, the bankruptcy trustee says, “Well, I don’t think you can.” They believed the house was worth $600,000, but based on my research, I believed it was worth $700,000. So we set to work about getting all the right paperwork in place. There’s a lot of paperwork that goes into those deals, but the bonus for you is that I handle all of that.
So, we got some paperwork happening, ordered a valuation with the bank … Sorry, that’s the door. Ordered a valuation with the bank, which, as I say, was returned at $700,000. They owed $550,000, which meant we were borrowing about 79 percent of the value of the property.
The massive bonus: They got to keep their home. I’m so proud that we were able to get that out of the line and resolve the issues for the guys and give them a fresh start to their life all over again, after all of this hell of the bankruptcy process.
What I want you to remember is, if you are going to file for bankruptcy, it has far-reaching ramifications. It’s not just limited to this stuff. Like, there’s certain countries that you can’t travel in if you’ve declared bankrupt, because they consider it to be of bad character.
So if you’re in that position or you think you’re even headed that way, we’ve got a number of lenders that will help you out. If you own property, that’s great. We can work with that. If you don’t own property but you do have other assets, at least talk to us, we can connect you with the people that can help you.
Don’t let it go. Don’t avoid it. Don’t just not answer the phones calls, it’s not gonna go away. Let me help you work it out. There’s our contact details. Give me a call, I’d love to help you.