Mortgage deferral, rent relief and bankruptcy: what you need to know if you have coronavirus money problems


Gregory Mowle, University of Canberra

The coronavirus pandemic has wreaked havoc on the Australian economy, and the financial effects for many are deeply personal.

Sadly, there’s no shortage of terrible advice online when it comes to personal finance. And as September 30 looms – the date by which JobKeeper, the increased JobSeeker and many negotiated rent and mortgage deferrals end – it’s important to be fully informed before you make potentially life-changing financial decisions.

As a former financial counsellor and former consumer credit educator for the Australian Securities and Investments Commission (ASIC), here’s what I think you need to know if you’re considering mortgage deferral, rent relief or bankruptcy.

Read more:
Going bankrupt is a life changing decision – so why is the process to do it so easy?

Mortgage deferral

Residential mortgages are covered by federal legislation, under which lenders can assist when borrowers can’t afford their usual repayments due to changed circumstances — such as losing hours or employment.

For example, you can ask your lender put on hold payments from June to September. It’s up to you and the creditor to establish clearly what happens to those payments. Are they pushed to the end of the contract, thereby extending the life of your loan? Or will you repay extra when you can afford repayments again?

Make sure you understand how much more it will cost you in additional interest if you extend the life of your loan by deferring these payments to the end of the contract. Depending on the details of your loan, you could be adding thousands of dollars to the amount you need to repay.

Most mortgage lenders don’t really want to repossess your house. It’s costly, time-consuming and stressful. But before asking for mortgage relief, you need to have a plan for the post-deferral period.

What happens if you still can’t make your usual repayments? Any licensed financial professional should be able to help negotiate a deferral on your mortgage or other consumer debts such as credit cards, but you should first consider seeing a free financial counsellor who is independent of any lenders. They can be contacted on 1800 007 007 or through the National Debt Helpline

Before asking for debt relief, you need to have a plan for the post-deferral period.

Rent relief

If you can’t pay your rent due to changed circumstances, you can ask your landlord to reduce or defer your rent. They can, of course, say no.

Unlike mortgage deferral, the implementation and process is inconsistent across states and territories. It can be difficult to navigate.

There are reports of some landlords asking for comprehensive financial statements to support claims, or for their tenants to access the early release of up to A$10,000 in superannuation to pay the rent.

Ausralia’s corporate watchdog, the Australian Securities and Investments Commission (ASIC), has warned real estate agents that advising tenants to take money from their superannuation may constitute giving unlicensed financial advice and/or be against people’s best interests, attracting possible fines and jail time.

If you’re talking with your landlord about rent relief, be clear on whether you’re talking about rent payments being reduced, deferred or permanently waived, and whether these payments would need to be made up by a certain date. Renters can seek help from free financial counsellors or a tenants’ union.

State and territory governments have established various schemes to help renters work out agreements with their landlord (see this Western Australian scheme as an example).

Read more:
What if I can’t pay my rent? These are the options for rent relief in Australia


Bankruptcy should be a last resort. Many creditors have shown they’re willing to provide short-term delays (for about 90 days, for example) if people need more time to pay a debt.

Consumer credit contracts are written on the basis that life has its ups and downs and if a debtor genuinely can’t pay, the creditor can help by reducing payments, stopping interest charges, deferring payments and/or restructuring loans.

In almost all consumer bankruptcies, there is no return to creditors so they generally don’t want debtors to go bankrupt. It’s in their interest to help debtors through a difficult period so they can return to making payments.

Call the National Debt Hotline before you make any big decisions around bankruptcy.

Of great concern to consumer advocates is that searching “bankruptcy” or “help with debts” on the internet will often generate results for companies with a vested interest in placing you in what’s called a “debt agreement”. These should be approached with caution. It basically means you pay for a company to help you declare bankruptcy – but this is unnecessary.

A debt agreement is an act of bankruptcy that directs fees to those companies and quite often places consumers in unmanageable and unsustainable long-term repayment plans.

Instead, try to find free financial counsellors, some of whom work for charities. They are professional, unbiased and expert at informing people of their options when in debt. They can be found via the government’s MoneySmart site.

If you can’t pay your debts, there are many options available. The key is contacting the right person or organisation – and knowing whatever comes up first in a Google search is not necessarily the best or most impartial place to get help in a financial crisis.The Conversation

Gregory Mowle, Lecturer in Finance, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Crystal Cathedral Being Sold Off Due to Financial Crisis

The famous mega-church building, the Crystal Cathedral in California, is being sold to meet financial debts that may see the church able to exit bankruptcy. The Crystal Cathedral is the mega-church which was/is pastored by Robert Schueller and his family.

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Crystal Cathedral Files for Bankruptcy

The Crystal Cathedral Ministries has filed for a Chapter 11 bankruptcy in the United States. This is the ministry made famous by Robert Schuller.

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Judges to determine whether Malaysians of other faiths can use the Arabic word.

MUMBAI, India, July 6 (Compass direct News) – With the Kuala Lumpur High Court in Malaysia scheduled to determine the legality of the word “Allah” in non-Muslim literature tomorrow, what is at stake goes beyond the sanctioned name for God among non-Muslims in the majority-Muslim nation.

Such a limit on free speech in Malaysia is especially biting for Muslim converts to Christianity; already the Malaysian government does not recognize their conversions and marriages and still considers their offspring to be legally Muslim. With non-Muslims increasingly feeling the sting of discrimination and Muslim elites feeling a need to assert a national Islamic identity, the skirmish over “Allah” is clearly part of a greater cultural war.

Malaysian authorities and Malaysia’s Roman Catholic Church have continued to lock horns over use of the word “Allah” in the Malay-language edition of the Herald, the church’s newspaper, as they await the ruling. The newspaper had been allowed to use the term until a final court decision, but the Kuala Lumpur High Court on May 30 overturned that brief reprieve.

The Catholic newspaper has provided a panoply of historical uses of “Allah” among Christians in Malaysia. The Rev. Lawrence Andrew, editor of the Herald, quotes examples from a Malay-Latin dictionary dated 1631, and the Dutch-Malay Dictionary of 1650 lists “Allah” as the vernacular translation for God.

“This is testified by the fact that we have a Malay-Latin Dictionary printed in 1631, in which the word ‘Allah’ is cited,” Andrew said. “To have a word in a dictionary means that that particular word has already been in use in the community prior to the dictionary. The word for ‘God’ in Latin is ‘Deus’ and in Malay, it is ‘Allah.’ Upon the arrival of the Dutch…a Dutch-Malay Dictionary was produced in 1650 where the word for ‘God’ in Dutch was ‘Godt,’ and in Malay, ‘Allah.’”

According to church sources, the Malay term for “God,” Tuhan, came into vogue only after deadly May 13, 1969 communal riots as part of a national unity campaign.

Andrew noted that “Allah” is an Arabic term derived from the same roots as the Hebrew Elohim, and that the word pre-dates Muhammad, Islam’s prophet. Besides ignoring history, Andrew says, the government also conveniently ignores its universal use among Christians in the Middle East.

“Since the status quo remains, we will not use the word ‘Allah’ in our publication” until the court says otherwise, Andrew said. “In fact we have not been using it since our January edition.”

Since 1970, the government of Malaysia has consistently championed Islam as a parallel source of identity and nationalism among the politically dominant Malay-Muslim majority. Dress codes, cultural norms and the Malay language underwent a rapid Islamization in tandem with discriminative actions against minority groups.

Christians were particularly hard-hit by the effort in the name of national unity. Licences are rarely issued for church buildings in the capital city, Kuala Lumpur. New evangelical congregations had to meet at either hotels or warehouses for their Sunday services while Islamic semiotics and terminologies swamped the intellectual and official discourse. Conversion of Christians to Islam were particularly trumpeted by the media.

These efforts have largely failed. Local churches continued to grow, and the number of secret Muslim converts to Christianity began to rise.

At the same time, pandemic corruption and political authoritarianism have gradually led to a sense of disenchantment with political Islam among many. This erosion in Malay-Islam dominance has led to political bankruptcy, as evidenced by disastrous results for the ruling coalition during March 2008 general elections.

Given these political realities, Malay elites believe they can ill afford to be seen as soft on minority “encroachment,” and observers say this need to ingratiate Islamists lies at the root of the tussle over non-Muslim use of the word “Allah.” Officially, however, the government says only that use of the word among non-Muslims could create “confusion” among Muslims.

The Herald has a circulation of 13,000 and an estimated readership of 50,000. The newspaper is sold in Catholic churches and is not available from newsstands.

Malaysia’s population is about 60 percent Muslim, 19 percent Buddhist and 9 percent Christian. About 6 percent are Hindu, with 2.6 percent of the population adhering to Confucianism, Taoism and other traditional Chinese religions.

Arabicization of Malay Language

The debate over “Allah” follows an effort by the government to promote the Arabicization of the Malay language at the expense of Sanskrit and Malay terms. When a Malaysian student has to refer to a pig in an essay or test, the required term is the Arabic khinzir.

Other Malay terms such as pokok (tree) and bunga (flower), long used to refer to loan principal and interest respectively, have been expunged from school texts in favor of the Arabic kaedah (base) and faedah (benefit).

Some sources indicate that the Arabicization of the Malay language, however, has come with unintended consequences, such as making Christian mission work and translation easier. Since the Malay vocabulary has its limitations, Christians can use time-tested Arabic-derived terms to provide meaningful context.

For a long time, the only Malay Bible available in Malaysia was the Indonesian “Al Kitab,” which, included the word “Allah.” As Bahasa Malaysia (official name of the Malay language in Malaysia) and Bahasa Indonesia are very similar, the “Al Kitab” can be easily understood by a native speaker of Malay. As a result, the “Al Kitab” was viewed as an unwelcome missionary tool by Malaysian authorities. Its legal status was heatedly contested behind closed doors during the 1981-2003 reign of then-Prime Minister Mahathir bin Mohamad.

Significant Christian indigenous populations in East Malaysia use Bahasa Malaysia as a language of wider communication. The Malay-language content of the Herald reportedly serves just that need: using the national language with universal terms across a multi-lingual Babel of tribal Catholic communities in East Malaysia.

Report from Compass Direct News