Yazdan

You have some difficult decisions to make but you need to make them now!!!!

Your options as i see them are:

You can try to play games and put hurdles in the way of a liquidator buy establishing caveats on the properties with any equity. You could establish second mortgages on the properties with equity in favor of a trust your family / kids are the beneficiary of, this would cost around $7000 each, appoint a friendly beneficiary of your existing trust. These are all delaying tactics and liquidators and trustees in bankruptcy powers are considerable and they have the capacity to undo most of these options the cost to them might be more than they could make and they may not bother or this strategy might backfire and show you to be a practiced in this space they could choose to make an example of you and try to keep you in bankruptcy beyond the 3 years, prevent o/s travel etc. The limited amount of equity you have in any property and the costs involved make this option not recommended. Don’t be coned into it unless you know the costs and the risks.

You can appoint a insolvency practitioner to attempt to negotiate a settlement called a part 10. This would cost 10k – 15K with no guarantee of success. The bank will value all your assets and might accept 20% payment as full settlement for the banks likely losses i.e 20% of a $300,000 loss. $60k. There will be at least $100,000 in costs for a bank in liquidator costs, agent fees, advertising fees, holding costs, legals etc. If you can get an agreement and make the payment you would be able to be a director and earn any amount of income you can from the time the full payment has been made and should be able to find a bank who will deal with you but will be on record for years. If they don’t accept your offer this is a declaration of bankruptcy and they will take possession of all assets and sell them. This could include your PPOR if you have not dealt with this prior to going down this path. This is the best option if you can afford a $15k gamble. If you could not get $60k my guess is you would have less than a 50% chance of success.

You can appoint a friendly trustee and put yourselves into personal insolvency / bankruptcy. This is not the end of the world and i feel is your next best option. You can be released from bankruptcy if your creditors agree to a composition which is more likely to be accepted than a part 10. Or just wait the three years. As a bankrupt with 2 dependents you could both earn around $60 k each if you have a company this can be coordinated so the company pays the tax and earns the additional income, if you can not do this they can take 50% of the income above this amount, cars can have up to $7500 equity in each.

To protect your house you could sell it to an investor at a retail price and offer to lease it back for 3 years at just above market rent with the option to buy it back in 3 years if you believe the subdivision option is a winner. Ideally this is an investor you know and trust. Be weary of the rent to buy guys that operate in this space as most are predators and want you to fail and not buy the property back.

You can try to sell each property and treat with each bank separately if their is a shortfall and if they accept your offer your credit rating would not be affected at all. Having said this is if one bank does not agree to the settlement i.e the one owed $360k when it’s sold they will still wind you both up if you can not agree on a settlement amount.

If you can refinance the properties you hold into one name not both ,do it. This option appears to be highly unlikely. Once you start making these applications your ability to refinance will be diminished and could trigger fresh valuations, obtain any redraw you can now.

I would be putting all the properties on the market ASAP. Make sure you have the contracts prepared with a sec 27 so you can get access to the deposit money before settlements and use this to pay for living expenses , schools fees, rent, household furnishings, pull small amounts out in cash frequently for current (future) living expenses, and to pay back the family members who lent the $50k so they can buy your home and give you the buy back option. Have no accounts with more than $1500 in your own names.

Increase all credit card limits so you have the capacity to get the $60k if accepted or use to pay family in cash. Beware all transactions will be scrutinized and can be undone if they are seen to be to sharp.

Your family that lent you the $50k have a legitimate caveat able interest and it would be ideal they lent you this money to help you hold onto a property with equity that you can not sell. Get a caveat in place minimal cost $1000.

Waiting for growth on properties in mining towns might be a longer more painful option and keep you broker than becoming a bankrupt. This option has a finish date which could be a relief and provide some light at the end of a dark tunnel.

Head up shoulders back deep breath. You always have options some are hard decisions.

p.s Who sold you the strategy to put all your eggs into buy mining town investments? They have most likely been paid 10% or more in commission on each sale. If your accountant referred you sack him.

• This reply was modified 9 years, 6 months ago by  www.forsaleforlease.com.au.
• This reply was modified 9 years, 6 months ago by  www.forsaleforlease.com.au.

I own a traditional agency as well as a online agency. The online agency has been set up to specificaly to give would be owner managers the tools they need to be at least as sucessful as an estate agent. Luke has eluded to the main risk that owner managers encounter is that you will have less advertising exposure than the agents as you can  not access http://www.realestate.com.au and subsequently your property is likely to be vacant longer and/or you will have less choice of the best tenants because this portal dominates rental searches in Australia. <moderator: delete advertising>

I will advertise your rental property on over 12 sites that include http://www.realestate.com.au and http://www.domain.com.au for $149 to list and $99 per month. It is very unusual to require the extra month. This is the most comprehensive online marketing package available for landlords at the lowest cost. I am happy to be proved wrong if there is a better alternative that I am unaware of. 

I you are prepared deal with the tenants, maintenance and rent increases. Then the only reason you could not be as successful as your local estate agent will be when it comes to finding a new tenant. If it takes you two more weeks than an agent then the saving will be lost. This is where my business could help you. It is critical to advertise on all the top industry portals to make sure you find the best tenant who will pay the highest price in the quickest time.