protecting ppor once it was bought in ones own name
- Thread starter Francine
- Start date
I dont kow if this will really help you rixter, if a lawyer wants to go you, thy will call up your property and mortgages are not shown. not until they are well into you would the discussion re mrotgages come up, at that point unless you seriosuly want to go bankrupt then you probably don'tt have a much strenghtened position. unless it was a huge claim against you of course.
if you go nankrupt they will look at where the mortgaged funds went to and pull it back into your name
if you go nankrupt they will look at where the mortgaged funds went to and pull it back into your name
Sorry can you rephrase what you are saying.. I can't make head or tails on what you have written.
Just because noone is planning to sue you doesn't mean you can't be paranoid.
Mortgaging is good, but what is the money borrowed for? The bankrupcty trustee can trace the funds, claw back money etc.
Transferring houses to spouses also doesn't really help 100%. Under the Bankruptcy Act transfers with the purpose to defeat creditors can be undone. Even if this was not the intention they can be reversed for up to 5 years. There is an interesting case involving a Barrister named Cumins (or Cummins?) who did this around 1974. He was later bankrupted by the ATO (no tax return done for 45 years) and they got at his wife's house - or his share which he transferred about 30 years prior.
There is also an interesting American case involving an options trader named Stephen Jay Lawrence. He was being sued and knew he was going to lose so he liquidated his assets (approx US$6mil) and transferred then to an offshore trust out of the reach of US authorites. The US court ordered him to return the assets, he argued that he had no control over the trust and could not. They put him in gaol for contempt of court. He was in there for 6 years and was just recently released - without giving in.
Transferring houses to spouses also doesn't really help 100%. Under the Bankruptcy Act transfers with the purpose to defeat creditors can be undone. Even if this was not the intention they can be reversed for up to 5 years. There is an interesting case involving a Barrister named Cumins (or Cummins?) who did this around 1974. He was later bankrupted by the ATO (no tax return done for 45 years) and they got at his wife's house - or his share which he transferred about 30 years prior.
There is also an interesting American case involving an options trader named Stephen Jay Lawrence. He was being sued and knew he was going to lose so he liquidated his assets (approx US$6mil) and transferred then to an offshore trust out of the reach of US authorites. The US court ordered him to return the assets, he argued that he had no control over the trust and could not. They put him in gaol for contempt of court. He was in there for 6 years and was just recently released - without giving in.
Last edited:
Here is a link to the judgment against Lawrence
http://www.ca11.uscourts.gov/opinions/ops/200014481.opn.pdf
Interesting!
http://www.ca11.uscourts.gov/opinions/ops/200014481.opn.pdf
Interesting!
Wow - the lengths to which some people go to hang onto their squillions is staggering. So he endured jail for 6 years to be (probably) now happily reunited with all his money.
The IRS and US courts will be watching his every move to pounce again.
What a life.
As I read it, he is not out of the woods yet.. the Bankruptcy court gets to reconsider from time to time whether further incarceration may persuade him to "turn over" the assets..
You have got to say, the Yanks love the idea of locking somebody up for as long as they can.
In Australia, only if he disposed of assets whilst bankrupt would he be liable to a term of imprisonment.. and that would be unlikely to be for more than a few years...
Note that, even outside the Bankrupcty Act, a voluntary transfer of property (no matter when made) may be set aside if it was made with the intention of defrauding creditors... see (in WA) http://www.austlii.edu.au/au/legis/wa/consol_act/pla1969179/s89.html
Equivalent provisions were used, I believe, in the Cummins case.
You have got to say, the Yanks love the idea of locking somebody up for as long as they can.
In Australia, only if he disposed of assets whilst bankrupt would he be liable to a term of imprisonment.. and that would be unlikely to be for more than a few years...
Note that, even outside the Bankrupcty Act, a voluntary transfer of property (no matter when made) may be set aside if it was made with the intention of defrauding creditors... see (in WA) http://www.austlii.edu.au/au/legis/wa/consol_act/pla1969179/s89.html
Equivalent provisions were used, I believe, in the Cummins case.
this is in essence what I was tryign to say
Although it won`t be 100% effective mortgaging to the hilt will still help deter those wishing to litigate against you. Before starting court proceedings it is a good idea to do some searches and see if the person you are suing has any assets. If they don:t then there is not much point in winning as they are likely to declare bankruptcy and leave you with the legal bills.
So if they do some searches and find some properties with mortgages they may just leave it and not go any further, giving up.
Other ways to protect yourself include using options, long term leases and caveats. But you still need to be careful because some people use friends to help out with these - what happens if the friend goes down or has family law issues etc? Would you want an option to purchase you home to fall into the hands of your mate`s angry wife?
So if they do some searches and find some properties with mortgages they may just leave it and not go any further, giving up.
Other ways to protect yourself include using options, long term leases and caveats. But you still need to be careful because some people use friends to help out with these - what happens if the friend goes down or has family law issues etc? Would you want an option to purchase you home to fall into the hands of your mate`s angry wife?
They would most likely be giving up if no mortgage was found!
If there is a mortgage, good chance of their being equity.
And good chance of opposite wanting to save their assets.
And better chance of a settlement.
A magistrate handing down judgement will have no consideration for your mortgage level.
If judgement is against you, you appeal, payup or bankrupt.
Having your asset "mortgaged to the hilt" is hardly protection at all.
And effectively there is hugely more chance of dieing in a car accident or from a heart attack.
You should be more concerned about that, unless your self employed and in a high risk biz.
no mortgage = unencumbered
Courts aren`t concerned with your mortgages or assets at all. They just hand down judgments and then it is up to the person with the judgment to enforce it. If there is no mortgage then they can proceed to get at the property or begin bankruptcy proceedings against the person which will force them to pay up or lose the property.
Courts aren`t concerned with your mortgages or assets at all. They just hand down judgments and then it is up to the person with the judgment to enforce it. If there is no mortgage then they can proceed to get at the property or begin bankruptcy proceedings against the person which will force them to pay up or lose the property.
Correct its not protection. The idea is using it to discourage lawyer advice to proceed to court in the first instance.
