There have been 128 chapter actions by colleges since 2021, of which 45 passed off final monetary 12 months.
The prime 5 colleges have been all in Victoria, and led by the 13 initiated by the Melbourne-based Sirius College final 12 months, adopted by Oakleigh Grammar, Overnewton Anglican Community College, Trinity Grammar and Wesley College.
Actions by strata our bodies in opposition to residents have soared. They accounted for simply 2 per cent of chapter actions in 2020-21 however final 12 months that had reached 12 per cent.
Financial Counselling Australia discovered strata our bodies in NSW, Victoria and the ACT are more and more aggressive in making an attempt to recoup charges from residents. Half of all compelled bankruptcies within the ACT final 12 months have been as a result of strata debt, a stage the FCA labelled as “severely disproportionate”.
In NSW, 16 per cent of all bankruptcies final 12 months have been as a result of strata physique actions, with 152 individuals straight affected.
FCA chief govt officer Domenique Meyrick stated modifications needed to be made to the nation’s chapter legal guidelines.
She stated too many individuals have been shedding their properties over money owed of $10,000, which have been usually made up of authorized charges, courtroom prices and penalty curiosity prices.
“Forced chapter is likely one of the most critical instruments accessible to collectors and will solely be used as a real final resort. Our report reveals that with out stronger safeguards and modernised legal guidelines, Australians danger shedding their properties and livelihoods unnecessarily over comparatively modest money owed,” she stated.
“Forced chapter is showing most in sectors that lack sturdy client protections, together with rights to hardship help or honest dispute decision. Put merely, it’s taking place the place safeguards are minimal.”
Mercedes-Benz Finance has launched the most important variety of chapter actions of any automobile finance firm over the previous 4 years.
The Australian Tax Office accounts for 13 per cent of bankruptcies because it takes extra stringent motion to recoup tax money owed.
Major banks have all however stopped chapter actions, which the FCA places down to higher hardship practices and codes of conduct.
But different lenders, together with car financing corporations, are moving into the breach.
Since 2021-22, the nation’s large 4 banks began 39 chapter actions. Over the identical interval, Mercedes-Benz Finance launched 41, whereas BMW Finance began 34.
Vehicle finance corporations account for 12 per cent of all monetary sector chapter actions, greater than banks and insurance coverage corporations mixed.
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While banks preserve a big share of total lending, there was sturdy progress by non-bank lenders that target small companies and sole merchants.
Since 2021-22, Bizfund – a lender that promotes itself as a enterprise specialist that gives loans of between $5000 and $1 million with out up-front credit score checks – has began 153 chapter actions, of which 64 have been in 2024-25.
Other small lenders with massive numbers of chapter actions embody Flexicommercial (59), TimberCorp Finance (29) and Metro Finance (23).
Financial Counselling Australia discovered small non-bank lenders have been now initiating virtually as many credit score actions in opposition to clients because the Tax Office.
“That means these largely unregulated lenders are wielding the identical enforcement energy because the nation’s tax authority however with far fewer checks and balances,” it stated.
In July final 12 months, then attorney-general Mark Dreyfus introduced the federal government would reform chapter legal guidelines with the most important change a rise within the threshold to start out motion lifted to $20,000. The threshold can be listed yearly.
Consultation on the modifications is ongoing.
Financial Counselling Australia stated the federal government ought to transfer shortly to implement the reforms whereas additionally require state and territory governments to overtake strata guidelines to supply help for these vulnerable to chapter.
