Equity in home, what happens to it?

[military_modele]

I am planning on filing bankruptcy after my wife and I sell our home. I owe about 193,500 AUD ( Australian Dollars) on the mortgage and the home has been appraised at around $240,000 AUD. I was told if we sell, since it is my bankruptcy, the trustee will be able to only take my half of the equity. Is this correct. My wife's name is on the mortgage contract, but she is not in the bankruptcy, all the bills in the bankruptcy are in my name only.

Question #2 is, if we sold the home and I paid back money to my parents since they loaned me money when I purchased the home, would that money be safe from the trustee, or is there a time period that the trustee can come after it, or do I need to prove that my parents loaned it to me? Is there any way to prevent any of the equity being taken?

Any help would really be appreciated.

TIA

[SinkingFast]

Not sure if Oz BK Law is structured the same or not. But in the US,.....

You are correct about the equity from the sale of the house. If you are filing BK alone, your wife gets her half of the equity and your half would go to the BK. That's if you filed BK within a year of selling the home. The look back period here on sale of property is 1 year. In some cases, the Trustee can request to look back 2 years, but must justify their reasoning to the Court.

If you sell the house and pay back your parents, that's considered a Preferential Payment to an Insider. Payments to unsecured creditors are considered Preferential in nature. Insiders are family or friends of yours. If you pay back your parents within a year of filing BK, the Trustee could go after them to get the money you paid to your parents back from them.

Call around to some attnys that specialize in the practice of BK Law. Consults here in the US generally are free. If that's the case for you, you could chat with a few attnys and get a better feel for the law in Australia.

[military_modele]

Not sure if Oz BK Law is structured the same or not. But in the US,.....

You are correct about the equity from the sale of the house. If you are filing BK alone, your wife gets her half of the equity and your half would go to the BK. That's if you filed BK within a year of selling the home. The look back period here on sale of property is 1 year. In some cases, the Trustee can request to look back 2 years, but must justify their reasoning to the Court.

If you sell the house and pay back your parents, that's considered a Preferential Payment to an Insider. Payments to unsecured creditors are considered Preferential in nature. Insiders are family or friends of yours. If you pay back your parents within a year of filing BK, the Trustee could go after them to get the money you paid to your parents back from them.

Call around to some attnys that specialize in the practice of BK Law. Consults here in the US generally are free. If that's the case for you, you could chat with a few attnys and get a better feel for the law in Australia.

My parents live in the US, if the payment was sent to them in the US what are the chances of them going after it in the US if the Trustee is in Australia?

[SinkingFast]

There've been some people post on here going the opposite way. Have debt in the US and leaving the country. But they wanna be able to come back to visit family or friends from time to time.

In our case, here in the US, the Creditors could only pretty much get civil awards against debtors. Judgements, liens, etc. Nothing that would prevent a person from coming to or leaving the US.

I took a peek at Australian BK Code. If you sell your house, wire the money to your folks, and then file BK, the Trustee will probably find that out as part of their investigation process. You could be charged with BK Fraud. So this is definitely an area you'd want professional input on.

Also sending the money to your folks creates a Preference. "This arises where a bankrupt pre bankruptcy has paid one or more creditors money or transferred an asset to them in priority to other creditors. A trustee can claw back this transaction once they establish 5 criteria to enable all creditors to share." What the 5 criteria are, I don't know. And whether or not the Trustee could get the money back from the US, I don't know.

I also saw, in the BK Codes, that Garnishing wages is allowed. Interesting. Creditors can go to Court to get wage garnishment orders here. In Australia, a BK Trustee can order the "bankrupt's income be garnisheed". And in Australia, it's not just income. It's cash and assets held by others on behalf of the Bankrupt.

You definitely need to seek out Consultations with attnys to see what they recommend as your best course of action.

[military_modele]

Wages and such

There've been some people post on here going the opposite way. Have debt in the US and leaving the country. But they wanna be able to come back to visit family or friends from time to time.

In our case, here in the US, the Creditors could only pretty much get civil awards against debtors. Judgements, liens, etc. Nothing that would prevent a person from coming to or leaving the US.

I took a peek at Australian BK Code. If you sell your house, wire the money to your folks, and then file BK, the Trustee will probably find that out as part of their investigation process. You could be charged with BK Fraud. So this is definitely an area you'd want professional input on.

Also sending the money to your folks creates a Preference. "This arises where a bankrupt pre bankruptcy has paid one or more creditors money or transferred an asset to them in priority to other creditors. A trustee can claw back this transaction once they establish 5 criteria to enable all creditors to share." What the 5 criteria are, I don't know. And whether or not the Trustee could get the money back from the US, I don't know.

I also saw, in the BK Codes, that Garnishing wages is allowed. Interesting. Creditors can go to Court to get wage garnishment orders here. In Australia, a BK Trustee can order the "bankrupt's income be garnisheed". And in Australia, it's not just income. It's cash and assets held by others on behalf of the Bankrupt.

You definitely need to seek out Consultations with attnys to see what they recommend as your best course of action.

My wife and I met with a financial counselling service last week, the gentleman we spoke with mentioned that if your net income is under $50,000 a year then they can not ask you to make contributions to the BK, not sure but even if they were only able to get my half of the equity in the home, that would be better then the $43K in debt. that will be gone.

And we do not have any assetts so there is nothing else.

Thanks for you help.