Bankruptcy is a process that is designed to act as a sort of mediator between someone who is unable to pay their debts and their creditors. It releases you from your obligation to pay your debts, but if you have any assets or substantial income that can be put towards them, you will be required to contribute those to your bankrupt estate. Bankruptcy doesn’t always mean one will lose their house.

Sometimes an arrangement can be made with the Bankruptcy Trustee whereby the bankrupt person’s share of any available equity can be purchased by a spouse or family member. The claim on the property is then transferred to the purchaser, effectively keeping it from the Trustee and, in turn, the bankrupt person’s creditors. This is not always an easy thing to achieve, though, because the purchaser will also have to pay stamp duty on the purchase of the equity.

In some instances, a person may be declared bankrupt and have no available equity in their property. A simple, general rule of bankruptcy is that if it is not worth selling something (ie. no money will be gained from it), it may not be sold. If you are made bankrupt and it is not worth selling your property right away, your Trustee may not have no reason to do so. However, the period of your bankruptcy will be a minimum of three years, so if the property increases in value during that time and equity becomes available, it will most likely be sold then. It is also possible, in some cases, for the Trustee to maintain their interest in the property for up to nine years.

If you are facing bankruptcy and you have an interest in a property, you should call us right away on 1800 462 767 for advice. We can help you to try and save your house even if you go bankrupt. Call us now for professional and confidential advice 7 days a week on our toll free bankrupcty advice line 1800 462 767.