All Topics / Legal & Accounting / Wraps & Bankruptcy
I am interested in doing a wrap and wondered what happens if the buyer goes bankrupt.
I know that if they dont make regular payments they are in default and the seller keeps title but what happens if they declare bankruptcy, dont tell the seller but keep making payments until the contract expires? Can they do this?
Bankruptcy I think is 3 years so if they keep making all their payments until after they are solvent again would this be a problem?
Is the seller somehow liable to the bankruptcy administrator?
Hope someone can help.
Hi Property4Me
I certainly don’t know enough about the bankruptcy laws to comment on that one. however, if you really need an answer from one of the country’s most experience vendor finance lawyers, I’d suggest you give Tony Cordato a call and ask him the question. His number is 8297 5600.
Good luck with your first wrap.
Cheers, Paul
Paul & Karen Dobson
negative2positive
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Phone: (02) 4984 9540Talk to us about Wrap Training Joint Ventures.
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I don’t know much either, but I would think if they have signed contracts and exchanged, nad have been making payments, then they have an equitable interest in the property. If they were to go bankrupt, a bankruptcy trustee would step into their shoes. The trustee would act for the benefit of the person’s creditors and they would act as if they were the bankrupt.
In this case, it may depend on how much equity is in the property. They would probably arrange for the property to be sold, and the equity, if any, to be distributed to creditors.
Terryw
Discover Home Loans
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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