Money matters & Risk management Anna Lyons - Senior Lawyer, Homeless Law May 2015 Melbourne Office PO Box 16013 Melbourne VIC Tel +61 3 8636 4400 Fax +61 3 8636 4455 justiceconnect.org.au/homelesslaw
Today’s topics • Credit and debt • Guardianship and administration • Running files and managing risk 2
Credit and debt What we’ll cover today: • Relevant law • Tips for running matters • Advising ‘judgment proof’ clients • Options: hardship, negotiation, dispute resolution, defending a claim • Homeless Law resources 3
Common issues • Credit contracts with financial institutions (eg loans and credit cards) Utilities and phone debts • ‘Payday loans’ • • Judgment debts • Mortgage arrears 4
Legislative landscape – consumer law Up Up to 31 Decembe mber 2010 • Trade Practices Act 1974 (Cth) • Fair Trading Act 1999 (Vic) From om 1 Januar ary 2011 (goo oods ds and services ices) • Competition and Consumer Act 2010 (Cth) (CCA CCA) • Australian Consumer Law (Schedule 2 to the CCA) (and changes to the ASIC Act 2001 (Cth)) (ACL) • Introduced in Victoria via Australian Consumer Law and Fair Trading Act 2012 (Vic) Finan ancial ial servic ices es • Australian Securities and Investments Commission Act 2001 (Cth) (ASIC C Ac Act) • Corporations Act 2001 (Cth) 5
Legislative landscape – consumer credit Up Up to 30 June 2010 Consumer Credit (Victoria) Act 1995 (Vic) Uniform Consumer Credit Code From 1 July 2010 National Consumer Credit Protection Act 2009 (Cth) National Credit Code (Schedule 1 to the NCCPA) Consumer Credit (Victoria) Act 1995 (Vic) 6
Things to know about before you start External Dispute Resolution • Industry codes that regulate the creditor • or supplier • Restrictions on debt collectors (ASIC Regulatory Guide 96, Debt Collection Guideline: For Collectors and Creditors ) Hardship teams – use them! • 7
Which legislation applies? • Consum onsumer er cr credit edit co cont ntracts racts (eg. loans and credit cards) – consider both the ACL protections (under the ASIC Act) and the consumer credit regime • Ot Other er co consumer nsumer co cont ntracts racts (eg. mobile phone and utilities) – only the ACL and relevant industry codes will be relevant 8
Taking instructions • Get a picture of the debt, loan or contract • Piece together information about the client’s circumstances • How did the client come to enter the contract? • What outcome is the client seeking? • Use the Taking Instructions Checklist (refer to workbook & www.hlp.org.au) 9
Sample budget Expen ense se Amount unt per f/n Rent Groceries Mobile phone Bills and other debts Transport (PT or petrol) Medication Child support Other (specify) TOTAL 10 10 Homeless Law Credit and Debt Training 2014
Risk Management 1. 1. Confli nflict ct checks ecks Note other parties • • Check commercial conflicts with your firm • Check Justice Connect/Homeless Law conflicts 2. Conf nfirm rmati tion on of instru ructi tions ons Send client engagement letter setting out scope of engagement • 3. Upd Update e PIMS • Up to date record of matter • For each separate matter (ie, debt matter and tenancy matter) 11 11
First steps – where to start? • What stage is the matter at? • How old is the debt? • Put a hold on enforcement • Gather relevant documentation • Get instructions on the client’s circumstances • Obtain to consent to make an appointment with a financial counsellor 12 12
First steps – stage? Limitation of Actions Act 1958 (Vic) s 5 (6 years or 15 years (judgment debts)). overdue bills • • being contacted by a debt collector • has defaulted on a mortgage or a secured loan • court documents served i.e. being sued to recover the debt • has received a default notice in relation to a secured loan Timeframes eg. 30 days from default notice 13 13
First steps – hold on enforcement Consumer nsumer co cont ntracts racts – call the hardship team, refer to their policies or regulations, file note, EDR Consumer nsumer cr cred edit it co cont ntracts racts – if it is a Code compliant default notice: • request postponement of enforcement within prescribed period (30 days) (Code s 94) • company has 21 days to give notice (and reasons) if no postponement, EDR and/or court application (Code s • 96) 14 14
First steps – gathering documents • Credit contract or contract for service, bills and correspondence from the creditor or debt collector (obligations under the Code s 185 and ACL ss 100 and 101) • Relevant codes of practice for the industry or particular creditor • Any court documents • Supporting reports (from client’s GP, caseworker, drug and alcohol worker, psychologist etc) 15 15
Is the client judgment proof? • Only income is from Centrelink • Doesn’t own/is not buying a house • Does not own any assets (eg. savings or jewellery not ordinary household items or one car worth less than $7,200 or “tools of trade”) • Limited capacity to earn in the future 16 16
Advising judgment proof clients • Make them aware of this option • Inform them of the consequences of relying on being judgment proof • Get clear instructions • Negotiate on the basis of the client’s hardship 17 17
Options for dealing with a credit or debt matter Short term measures – hardship • • Negotiation or dispute resolution – most common • Defending a claim – Timeframe (21 days in the Magistrates’ Court) Judgment proof – – Negotiation – Table of defences 18 18
Case study – Elaine • Elaine owed $750 to a phone company for a home phone bill • The debt was incurred about two years ago when Elaine was living in a private rental property • The debt had been sold to a debt collection company and was around three years old Elaine' ne's s circum umstance stances • 25 years old and unemployed • Has a brain injury resulting from a car accident and schizophrenia She is currently living in emergency accommodation • She has been homeless on and off for several years • Elaine had been unable to make repayments on the debt • 19 19
Case study – Elaine (1) What questions to ask Elaine? (2) What legislation applies? (3) What codes of conduct apply? (4) What are Elaine’s options? (5) What are the first steps to take? (6) Any other legal or non-legal issues? 20 20
Matter closure letter The letter to the client must include: • The instructions you were given The steps you took to resolve the matter • The outcome • • The matter will now be closed, documents will be kept for seven years • The client should contact Homeless Law if they have any legal issues in the future 21 21
PIMS matter closure PIMS must be updated with: • instructions given, steps taken, outcome (eg. size of debt waived) • a statement about the client’s satisfaction with the outcome • a copy of the matter closure letter 22 22
Risk management recap Conflict checks • Updating PIMS • Be aware of timeframes • • Always make thorough file notes • Presume capacity – contact Homeless Law if unsure Consult Homeless Law if counsel might be • needed • Matter closure letters and PIMS must tell the whole story 23 23
A word on file notes… - File notes must go on PIMS - Every time you contact a client or try to contact them - Include the date and time - Note what you have said and asked, as well as the client’s instructions 24 24
Credit and debt - Resources • Homeless Law in Practice: www.hlp.org.au • Policies & Procedures Manual Your firm supervisors and Team Leaders • • The Homeless Law team (8636 4408) 25 25
Guardianship and Administration What we’ll cover today: • Key legislation • Key concepts • Brief overview of hearings at VCAT • Capacity • Reassessment and review of VCAT orders • Resources & where to go for further information 26 26
Legislation • Guardianship and Administration Act 1986 (Vic) (Guar ardiansh ianship ip Act) • Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCA CAT Act) – Sets out procedure at VCAT (matters heard in the Guardianship List – Human Rights Division) • Charter of Human Rights and Responsibilities Act 2006 (Vic) (Ch Charter) – May impact upon the interpretation of the Guardianship Act. Section 32(1) of the Charter: “so far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights”. 27 27
Guardianship Guardianship is the appointment by an order of VCAT (a guar ardians ianship hip order er) of a person (a guardian dian) to make personal decisions for an adult with a disability (the repre rese sent nted d perso son). It is possible to apply for a temporar ary guar ardians dianship ip order er for a period not exceeding 21 days. Joint nt guar ardians dians may be appointed. 28 28
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