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Is it legal for a financier to stop a customer paying a

Is it legal for...

Is it legal for a financier to stop a customer paying a substantial amount off debt to financer

Lawyer's Assistant: What state/territory is this in? It matters because laws vary by location.

Qld

Lawyer's Assistant: What steps have been taken so far?

They foreclose on business later citing non repayment of debt

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Yes, is it legal to issue Farm Debt Mediation to a client (farmer) when the farmer has been trading insolvent as financier encouraged use equity as income

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Answered in 1 minute by:
3/16/2018
Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 46,970
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
Verified

Hi, I am Leon, a NSW Solicitor. I am reviewing your question and will reply again in a moment.

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Good Morning

What does the loan agreement say?

Can you give me more details of the situation?

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Customer reply replied 5 months ago
Mate I'm in Federal Court atm
Just trying to source other opinions
Contract says nothing about stoping early repayment
Was a 15 year % only loan (not due to expire until 2019)
Customer reply replied 5 months ago
Financier changed terms of contract initially, calling in lump sum permanent loan repayments only months initially after refinancing with them.(called in 1.4mln 5 months later - was met)
Customer reply replied 5 months ago
You've said good morning - but it's afternoon in Qld & Nsw - are you actually a qualified Lawyer and in Australia??

Good Afternoon

If the contract allows you to make any payments at nay time then they cannot refuse to allow it.

In some contracts they have a clause that says you cannot make payments in advance of more than $10,000.00 and if you do there is a fee for making the payment and they have a formula of how that fee is calculated.

I am in sydney

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Customer reply replied 5 months ago
Wanted to pay $2.65mln + otherOnly thing contract says was must have minimum $250k debt.What about the FDM scheme - it's different in Qld to Nsw
Just need to know about the insolvency but as in first message
Customer reply replied 5 months ago
Ps hope you legal fellas are watching the Royal Commission into Banking - banks can't hide anymore with these QC's asking questions

What do you mean by the FDM Scheme

Also there is not enough information about the insolvent trading and the loan for me to comment.

If you want to talk on the phone please consider it it ay be easier.

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Customer reply replied 5 months ago
Farm Debt Mediation
Issued by financier to farmer
It's a "voluntary" scheme in Qld (* if farmer doesn't attend, receivers are appointed and farmer court ordered off farm)
To be solvent a farmer must be earning an income off their land under ATO guidelines ie livestock production or farming (growing crops)
If farmer is unable to make a profit and financier encourages farmers to use equity to borris from the bank to pay the bank even though farmer says that it is bad business.
So no primary production, use of equity (know as asset stripping) means primary producer trading insolvent.
This should mean that according to FDM that financier would know they have been asset striping the farmers equity- the farmer has been trading insolvent.
Are financiers able to issue Farm Debt Mediation "invitations" when they know the farmer is insolvent ?

If the bank has given the farmer bad advise knowing that the farmer could not pay back the loan and they had no possibility of earning the money then the bank can be held liable.

You have to look at the advise given and the banks knowledge.

You say you are in court? I assume for the farmer to be wound up, this is past the FDM process.

If the bank has been misleading the farmer so that they lose their farm the bank can be liable but you have to have evidence of the banks actions.

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Customer reply replied 5 months ago
Thanks. Will have to research the insolvency act (I'm not a lawyer, I'm a farmer). Or guidelines?
Thanks for trying to answer.

Good Afternoon

There is no insolvency Act

You need to look at the corporations act.

It deals with corporations and insolvency

http://www8.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/ca2001172/

All the best and good luck with it.

If you wish to have a phone call to discuss this in more detail please elect a call or I can send you a request.

I hope this makes sense and is of assistance. If you have found my answer to be helpful, please rate me five stars so I can get paid for my services to you. You rating my work 5 stars allows me to continue to provide a service to those who require it.

I am happy for you to ask further questions on anything you wish more detail on.

Let me know if I have answered your question today.

Regards

Leon

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Customer reply replied 5 months ago
Ok. I just don't know how to verify that you are a qualified lawyer that's all.
What is your surname so I can then give a true rating for you?

Good Afternoon

I have been verified by Justanswer

Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 46,970
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
Verified
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DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

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