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Ask Deborah Awyzio Your Own Question
Deborah Awyzio
Deborah Awyzio, Solicitor
Category: Australia Law
Satisfied Customers: 863
Experience:  Bachelor of Laws (QUT), BIT (QUT), Family Law Accredited Specialist, over 12 years experience
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My question relates to a defacto partners property rights in

Customer Question

My question relates to a defacto partners property rights in the event of bankruptcy
I am probably going to have to become bankrupt by the end of the year. I thought that because under family law my partner would have rights to a share in the equity of my house, he would be protected. Now that I am getting advice from bankruptcy agents this doesn't seem to apply to bankruptcy law.
The title and mortgage of our house is under my name, I tried to get my partner onto the title at the begging of the year but because my partner had some bad debts in the passed, the bank wouldn't agree to him going on to the mortgage.
We have had joint finances with his income helping to pay household bills and the mortgage since we met at the end of 2010.
When the bank turned down the request for him to go onto the mortgage, my solicitor who did the paperwork for his name to go onto the house title told me that it didn't really matter as he would be treated as a legal defacto anyway. But this doesn't seem to work with bankruptcy. We don't want to break up the relationship but is there anything we can do in the family court pre-emptively to have his claim on equity recognised.
Yours
Niall Mahany (###) ###-####
Submitted: 1 year ago.
Category: Australia Law
Expert:  Leon replied 1 year ago.
Good Evening, My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question. Please understand this is not legal advise Please understand this is not legal advise but a guide to assist you.The bankruptcy only impacts on you. If your partner is a co borrower or has signed guarantees for your loans etc then they will be held liable for the debts.Her share of the property is not going to be affected unless as I said she is a co borrower or guaranteed your loans. If the property is in your name, then they can take it. If your partner commences proceedings in the family court and orders are made that they have a share then this can avoid that share being touched but you will need orders. Your partner may have to commence proceedings that you hold part of the property in trust for him. This has to be done in the Supreme Court and can be expensive. Family Court only deals with separations not anything else. The equity belonging to him has to be dealt with in the Supreme CourtI hope this makes sense?