Can debt collectors remove assets from family members if one family member declares bancruptcy? Are family members entitled to lay claim to part of property / house if they live at that address?
My mother & father in law both in their late 70s are struggling to live on gov pension they have no assets only a car valued around $4000. My father in law also has a loan of almost $30000 and rent privately, My father in law has declared bancruptcy and we have applied for a moveable unit with the dept of housing to be located on our property. This means they will save considerably on rent. Can the debt collectors remove assets from our property if they do this? And down the track because they will be living at our address can they lay a claim / entitlement to our own property? We are doing this because my father in law has a heart condition, diabetes, is legally deaf and suffers sleep aptnia. We see no other option other than them moving in our house with us! At least this way they can keep some sort of dignity in their old age, independence & privacy .
Movable units are usually hired from the Department of Housing , so there is no ownership of such.
The hiring agreement sets out the terms and conditions, and the responsibilities and obligations of the property host, the applicant and the Director of Housing.
By signing the agreement, the applicant agrees to pay the weekly or fortnightly hiring fee for at least 12 months.
Once bankrupt your father in law can no longer sell or deal with most of his assets or items of value, the exceptions being property protected under the Bankruptcy Act, as shown below. Only the trustee or a secured creditor is able to do so. The trustee may dispose of your father in law’s property for the benefit of creditors.
Assets include anything of value belonging to him at the date of bankruptcy together with assets acquired by him before his discharge including lottery wins, prizes of value etc.
Your father in law’s interest in real estate,, money in bank accounts, vehicles exceeding the prescribed amount in value, stocks and shares, antiques and other personal property of saleable value are all included. Any interest he has or acquires during bankruptcy as a beneficiary of a deceased estate belongs to the trustee.
Certain assets are protected by the Bankruptcy Act which means they cannot be sold by your trustee to pay creditors. The property protected by the Bankruptcy Act includes necessary household furniture, personal effects, limited tools of trade, life insurance and superannuation policies and his primary means of transport up to the prescribed amount in value (eg. car or motor bike). At the moment it is up to a net value of $7600 so your father in law’s car should be fine.
Going into bankruptcy will remove any obligation on him to repay the $30,000 debt.
Debt Collectors would need a court order to go onto your property. Also, your own property is your property and not part of your father in law’s bankruptcy, so will be safe from the Trustee.