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Will I be taken to court?

Discussion in 'Legal Issues' started by pindipindi1986, 27th May, 2016.

  1. pindipindi1986

    pindipindi1986 New Member

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    Hello.
    Looking to see if anyone has(or knows someone who was) been in this position and could they advise what the outcome was please.
    We are a husband and wife and have several properties. All was going well until about a year ago when my wife lost her good paying job. This put a lot of pressure on our finances but we have continued to struggle along with payments etc. Our situation has only gotten worse. A little more debt to stay afloat and not making any headway. We are going to drown. I have tried to sell the properties but the market isn't great where they are so haven't gotten anywhere there. The properties would be worth less than we paid for them. If we go to the bank and say they can have them back because we can't meet the payments I acknowledge that they will sell them to pay out balances owing. All of our home loans are with one bank bar the one we live in. My question is this:
    If we call it quits can they take the home at the other bank and take us to court for any further monies owing? Thank you in advance.
     
  2. Mumbai

    Mumbai Well-Known Member

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    Whereabouts are you based in Australia?
    I have not been in this situation, but heard from someone who has been that talking to the bank/lender and getting a payment plan formalized works.
     
  3. larrylarry

    larrylarry Well-Known Member

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    You should try to speak to the bank regarding your hardships and predicament, and make alternative arrangements. Go from there.
     
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  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If the bank makes a loss they will try to recover the money from you. This could end up with both of your becoming bankrupt - which may not be as bad is it sounds.

    But before you get too far I would do what Larry suggests. They can be very accommodating at times.
     
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  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Banks are often more likely to accept a interest only period to enable a plan to be put into place.
    There may be a way for you to access arrears from super although that is very hard to do if they arent at the point of exercising right under mortgage to sell your HOME (Read up on Dept of Human Services website) There is a way to access a singe release of super if your wife has been unemployed however !

    Sometimes they will even suspend interest in special cases. They do have special teams for this. They dont win if you default. Talk to them asap and they will seek a report from you on your position and income / expenses.

    You cant "give a property back". You own it.
    They may work with you to allow you to sell one etc and this may be enough.

    Also consider speaking to a financial counsellor service at Salvo's and other similiar places. They have the experience to assist.

    :) Good that you asked. Thats the start to a solution.
     
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  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Do this absolutely. Honestly it is the best thing to do and probably should have been done before thr drowning set in. If you had previously been a good payer they can suspend payments for 3-6mths to get you over a tricky period.
    I'm sure they will still offer assistance now.
    How come the properties are worth less than you paid? Are they in a regional area?
    I hope you can work something out.
     
  7. larrylarry

    larrylarry Well-Known Member

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    Yes to the above. Open communications with the bank ASAP. I was involved in a case where the husband ignored the bank's letters after arrears for about a year. Boom!
     
  8. Marg4000

    Marg4000 Well-Known Member

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    My cousin was in a similar situation. After selling a business they owed money to the bank.

    To keep their PPOR they rented it out and moved back home with her parents. This enabled them to keep paying their mortgage plus paying back the bank debt. Been two or three years now, so not a quick fix.

    It will be better for you to sell properties than the bank.

    Is your wife working? Even at a lower salary, every dollar helps.

    But, as said, your first step should be a full and frank discussion with the bank. It is in everyone's best interests to sort things out without your defaulting.

    This is simply a setback. Whether it is temporary or permanent is up to you.

    Good luck!
    Marg

    PS. Yes, they can take your house to settle your debt. But this is a last resort.
     
  9. JDM

    JDM Well-Known Member

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    If they sell the properties and there is a shortfall they will pursue you for this amount. If you have no money they may either offer you a personal loan for the shortfall or commence proceeding to have you declared bankrupt.

    The fees associated with a bank exercising power of sale are much higher than you selling the properties yourself. Think receiver and manager fees, legal fees, valuation fees (bank won't sell without getting a valuation), full marketing campaign (may be more expensive than the marketing option you would choose). These are fees that you will be liable to pay and will be added to your debt.

    Long story short - I would do everything I could to sell the properties before the bank does if I were in your position.
     
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