by D Hatharasingha

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Author: FourLion Legal

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Irresponsible Lending

During a property market upturn in WA, our clients borrowed money from a bank to purchase an investment property. At its peak the property was valued at a significant amount but when our clients eventually sold the property, it had decreased its value by 90% and the amount they received was therefore significantly lower than the mortgage amount they still owed leaving them in significant debt. Our clients were considering declaring bankruptcy, but we advised our clients to consider other options. We assisted our clients to successfully negotiate with their bank in relation to their debt and managed to secure an agreement to settle the debt for a much more reasonable amount and avoid bankruptcy.

Default of Mortgage

Our client entered into a variety of new business ventures using equity in his family home. Unfortunately, these business ventures eventually failed which caused him to default on the mortgage repayments of his home loan. The Bank notified our client that they would soon be auctioning his family home in order to recover the debt. We assisted our client to negotiate a new payment arrangement with the bank which allowed him to keep his family home.

Irresponsible Lending

Our client used equity in his property to borrow money which he invested in the property market. Our client, without understanding the full implication of the loan contract terms, signed a mortgage with his bank. During the downturn in the property market the value of the investment was lost and our client was on the brink of losing his home. We assisted our client to negotiate with the bank and keep his home for the remainder of his natural life.

Winding Up

Our client’s business underwent significant losses and as a result the company incurred significant debts. Our client’s easiest option would have been to wind the company up, however the company had a cause of action against another entity which, if successful, would have covered all of the debts and put our client’s business back in the black. We successfully negotiated with our client’s creditors to allow the company to continue trading.

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