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Unrealisable Assets - Security for Borrowing
Last amended: 24 March 2006
Person expected to borrow
Before accessing the financial hardship rules, a person is expected to borrow against an asset if:
- they are able to meet the repayments,
- the asset is considered appropriate security by a financial institution, and
- the hardship is temporary. More ? ore?
A person who owns substantial business assets and who is experiencing temporary hardship is expected to attempt to obtain a loan by offering their business assets as security.
Evidence to be provided of inability to borrow
Where a person undergoing temporary hardship is unable to borrow against their assets, written confirmation is to be provided to verify their claim. Confirmation can include letters from a person's:
- solicitor, or
- financial institution manager.
A person is only expected to borrow from:
- banks, finance companies and similar institutions with whom they normally invest, or
- any government body set up to assist those specific persons, such as the Rural Assistance Board.
A person is not expected to enter into a loan agreement with interest rates more than the prevailing rate charged by banks and similar institutions.