HELP! Bad credit rating not our fault...

We are in the process of re-financing our home and investment loans. We have found a great deal that would save us over $500 a month.
We've done all the paperwork, and all seemed to be fine, until today. Our broker sent us an email saying DH has major credit problems... ????? We've never had a problem with credit, I was so confused, until I saw what it was.

When my FIL was getting a divorce, he put DH on the paperwork as an additional director of his business/company, so that my MIL wouldn't be entitled to as much.
Well... my FIL is F****NG USELESS when it comes to pretty much anything in life, and in particular paying bills. Because these bills are under the business name, my DH now has a bad credit rating.

Does anyone know if we can do anything about this??

Oh no, that's terrible! I don't have any advice, other than to seek legal advice, surely there's something that can be done!

Did your DH agree to his name being used as a company director? Did he sign an agreement/contract??

Unfortunately it's part of being a company director, your DH was responsible for those bills too. Unless he's been given a position in writing where it states he has limited liability and responsibility. If it's a company and he's a shareholder he may also have a very small holding compared to your FIL. I'd get things like that in writing and if it's clear your DH is basically a name on paper and isn't responsible for the late payments, you can give it to your financial institution and ask them to re-assess.

Your DH needs to find out what's going on immediately, what debts they are, and what personal guarantees he's signed.

If he's agreed to be a Director he can be personally liable for certain debts like some types of over due tax, meaning he can get chased PERSONALLY for it.

From the ATO's webite:- ATO - Director Penalty Notices

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Director penalty notices
Company directors have a legal responsibility to ensure that their company meets its pay as you go (PAYG) withholding and superannuation guarantee charge (SGC) obligations.

The director of a company that fails to meet a PAYG withholding or SGC liability by the due date automatically becomes personally liable for a penalty equal to the unpaid amount.

When a PAYG withholding or SGC liability remains outstanding, we may issue a director penalty notice, although this is only necessary to enable us to start legal proceedings to recover the penalty. Even without issuing a notice, we can collect the penalty by other means, such as withholding a tax refund.

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Your DH needs to find out what's going on, and get some legal advice. Stat.

According to the Magistrates Court, they were going to issue a warrant for DH's arrest but for some reason they didn't... Thank god!

From what we can find out, this all has something to do with the local council - I'm assuming FIL didn't pay the rates. The council says they have no record of this, so we called the magistrates court. They told us the record is there, but they can't tell us what it's relating to.

We now have to wait till Tuesday because there only seems to be 1 person at the council who would know about this and he is away until then.

What a mess!!

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Did your DH agree to his name being used as a company director? Did he sign an agreement/contract??

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Yes he did. Dumbest thing he's ever done, but I doubt he thought through the implications of doing this 'favour' for his dad.

At the time I remember specifically saying 'As long as it doesn't affect us financially...' To which DH said 'Naa dad told me it won't'. Yeah right!

If there's a judgement at Court, and your DH is a party, then he should have been served with a copy of all of the documents, and he should be able to inspect the file and get copies of the documents and any judgements that affect him. You might have to pay for them - just ask.

Oh no, that sucks :( What is your FIL saying about all of this? Hope you can get is sorted asap.

You dh needs to resign as a director right now if the company is still registered. Unfortunately he is liable for past debts. Hope you can find out what they are.

Yep, I know black rose, I've told him he needs to resign, which he agreed he wants to do.

FIL is saying he knows nothing about all this because he used his accountant's address as the business address. He then changed accountants, and the other guy didn't forward anything on.
Which may all be true - but as some point don't you think... Hey, I haven't received a rates notice for 2 years!?

An arrest warrant would not be issued for an unpaid debt? He should have been served court docs - statement of claim etc - something does not sound right

I am guessing that all of that was sent to the 'business address' - my FIL's old accountant.
I have no idea... But I know we didn't get anything. This is the first we are hearing about all this.

Wouldn't a summons have been issued to appear in court?? Where did that go? If they can't locate you, do they just go ahead with the hearing without you?

The stupidest part about all this is that if the council really wanted to find us, all they needed to do was look within their database. We live in their area, and pay rates to them - on time!!

I think that the summons would be a statutory creditors petition as it is a company - technically it would only have to be served on the registered office of the company.

We always server registered office, place of business and directors personally (but only if they were a personal guarantor of the debt).

Your husband needs to speak to a solicitor ASAP - I can not stress this enough - there are far reaching consequences that could affect your personal assets.

Please call someone tomorrow.

I

How did you go?

Called the council first thing. The guy they have told us to contact is 'unavailable', we are now waiting for a call back from another lady who is not in until tomorrow. It sounds like no one wants to deal with it.

I'm also waiting on a solicitor to call me back.

So no progress as yet - just my anger and stress increasing! We went from feeling like we're finally getting everything in order with financial security and stability, to this... Stress and panic.

Do you know who the old accountant was - your husband should call them and ask for a copy of any documents - he also needs to call the current accountant and get a copy of all financial statements/records for the company.

Yep, current accountant will send something through today. Old accountant said he'll see what he can do... Was very rude and not interested in helping

What a nightmare - good luck with it all.

It might also be worthwhile calling ASIC to make sure the company has not been deregistered etc.

Good luck with it all :)

Update...

We finally got to speak to someone at the council who was willing to help and look into this for us.
The bills/fines have been paid. The debt collector has either not been told or reconciled this, and has not closed the case.
The lady at the council is writing a letter for us to submit to Veda to have the record cleared.

She then went on to say that there is currently $2000 owing that has not gone to the debt collectors yet, but is late, so can we please pay it. DH is going to drag FIL down there tomorrow to pay it.
DH also updated the business address with the council, so there are no excuses.

While this is all happening, DH has submitted his resignation from the business.

You'll find that the person who listed the default is the only person who can ask Veda to remove the default.

So if council did, they need to communicate with Veda. Likewise, if a debt collector listed, they need to fax the removal to Veda.

Veda can be hard to deal with, plenty of "not my jurisdiction" crap played between Veda and creditors.

Sounds like a stressful time! Glad it's getting sorted (and your DH is stepping back)

So you don't think the letter from the council will be enough?

You can definitely try, can't hurt. I worked in a huge corp who were harsh defaulters. Every time I managed a Veda removal it was always after the customer was told by Veda the direction needed to come from us (they are very strict with their listings)

Here is what they say:

"If the entire listing is incorrect, such as an overdue debt that is inadvertently listed on your credit report by a credit provider e.g. the debt is statute barred, Veda, after investigating your complaint or on the advice of the credit provider, will remove the listing."

If you actually have a letter from council saying that the defaulted was listed in error - it will be removed entirely. If the letter says "account has been paid" the default will merely be updated to reflect it's paid.

Does the letter clearly state the default was listed in error? Make sure it's extremely clear this needs to be removed not just updated

Hmmm no, it says the account has been paid.

Ok. Get a stat dec with your dh's side and submit with the letter

You read my mind! That's exactly what I was thinking. :)

Just bare in mind that Veda don't remove defaults easily.

What they'll do is investigate the default and ask council to justify why they listed it. If they cn produce proof why your DH was defaulted and is within the code of credit, it will only be updated to paid (which means his credit will still remain impaired)

If it's found that he isn't liable for the debt, it'll be removed completely.

Ideally, if you can get the council to write something along the lines of "xyz was not responsible for this debt, the default was applied in error please remove completely" - Veda will remove.

The letter you currently have looks as though it'll be updated to "paid"........doesn't help getting through a finance application.

Let me know how you get on (PM if needed). Their criteria is strict but not impossible to maneuvere ;)