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  • Profile photo of Property4MeProperty4Me
    Member
    @property4me
    Join Date: 2006
    Post Count: 1
    August 23, 2006 - 1:44 am

    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.

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196
    August 23, 2006 - 12:41 pm

    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
    Turn your negatively geared property into positive cashflow.
    Phone: (02) 4984 9540

    Talk to us about Wrap Training Joint Ventures.

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 24, 2006 - 11:59 am

    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
    Parramatta
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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