The loss of a bankrupt’s family home is usually felt more intensely than the loss of any other asset.

2. Bankruptcy and the Family
Home

4. The loss of a bankrupt’s family home is usually felt
more intensely than the loss of any other
asset. Understandably, bankrupts know that the loss
of the home will disrupt the family unit, not only
affecting the bankrupt but also their children and
partners/spouses that may be solvent.

5. When the family home is jointly owned by the
bankrupt and a solvent (non-bankrupt) co-owner,
the trustee can still insist on the bankrupt’s share
of the equity being realised.

6. A joint tenancy is automatically severed upon the
bankruptcy of any one of the joint tenants insofar
as it relates to the ownership interest of the
bankrupt. This occurs due to the ‘involuntary
alienation’ or severing of the legal rights of the
parties necessary to create a joint tenancy. After
the severing of the joint tenancy, those interests in
the property are held as ‘tenants in common’.

7. The equity of the family home will usually be
determined by a property valuation.
The family home will be realised when it is
sold. Where there is a co-owner, the trustee will
usually take these steps:

8. Give the co-owner the opportunity to buy the
estate’s interest in the property.
If that is not possible, see whether the co-owner
will join with the trustee in cooperatively marketing
the property on agreed terms.
If an agreement on selling the property cannot be
reached, the trustee can ask the Court to appoint
a ‘statutory trustee for sale’ over the co-owners
interest to force a sale of the property.

9. From here, the sale process will begin.
If your family home may be realised due to
bankruptcy and you would like to know more,
please contact our office for further advice and
assistance.

10. For more details
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http://www.bambricklegal.com.au/
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(08)8362 5269