Forum Replies Created
- Terryw wrote:Imagine X owns a house with heaps of equity. He suddenly gets a court judgment which is recorded on the credit file.
He needs some money to pay the judgment, but he cannot get a loan now because of the blemish. He could be stuck.
Now imagine if X had used a discretionary trust with a company as trustee. Initially he was the sole director and so he was the one that guaranteed the loan. This was no problem before, but it is now that he has a judgment. The bank won't lend the trust anymore because of his blemish.
So a way around this would be for him to resign as director and put his wife as director. She is working and has a clear credit. The bank then gets her to guarantee the loan and releases some funds.
( this is a simplistic eg, there are a lot of factors to consider with this sort of thing)
I think you pretty much answered my last question just there, although as you said it is a simplistic description.
Hi Terry,
Interesting, so can you remove yourself as a guarantor to free up your borrowing capacityy again? (By removing liability or debt?)
Terryw wrote:Discretionary trusts also offer significant tax flexibility and can make borrowing more flexible as well. Also are estate planning benefits.Hi Terry,
Can you please elaborate on what you mean by “can make borrowing more flexible?”
Thanks
ryan mclean wrote:I plan to buy 3 positive CF properties this year with $0 in equity and earning a combined wage of $40,000/yr (me and my wife) If you want to buy 5 more properties by Dec 2010 then you should check out http://CashFlowInvestor.com.au they are a property finding service and are way cheaper than property brokers.Hi Ryan, just curious as to how you are going to do this? You obviously have some tricks up your sleave.
vlcommo
