Business Failed but Kept the Family Home

Jane* was in trouble with her business which she ran as a company. Business this year had not gone well with several large accounts not paying bills and leaving a large hole in her cash flow. She had rent due, Tax due and Suppliers to pay.  She had hit her credit limit with suppliers and couldn't even quote on new jobs. Jane was now insolvent as there were not enough assets or income to cover the business debts.

Jane owned a property worth $275,000 with a mortgage of $150,000 to fund her business (this mortgagee was a second tier aggressive lender paying a high interest rate) and three legitimate additional creditors who had placed a caveat over the property for secured interests and personal guarantees totalling over $300,000.

First Fast Debt Help called in a Liquidator to wind up the company and make sure all personal guarantees and debts were realised so that we knew exactly where Jane stood. This also handled outstanding Tax Debt.

Once we had the full picture on the remaining Debt, we prepared Janes Bankruptcy and gave it to the Trustee.

The house now belonged to the Bankrupt Estate.

Upon confirming the above mentioned figures and situation the Trustee negotiated with Jane, the mortgagee and the three creditors for Jane to refinance and take ownership of the property for the following:-

  • $150,000 to repay the mortgagee
  • $70,000 to repay the secured interests and the Bankrupts share

 

The creditors accepted Janes offer and the bankruptcy was annulled.

This could also have been handled as a Part X but taking advantage of the legislation to annul the Bankruptcy, worked out better for Jane

 

Jane kept the property and ended up with a mortgage with lower monthly repayments.

 

*Names and some circumstances changed to protect the individuals privacy.

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