Bankruptcy and Joint Property - What is Impact on My Partner?

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7 July 2014
To cut a long story but I am being forced into bankruptcy by a company from a legal settlement debt that I simply cannot pay. My partner and I have a joint loan on the family home. All other personal loans and debts accounts, etc. are separate and unsecured.

My question is that if I am personally bankrupt, but my partner is capable of fully servicing the joint home loan, where does that leave us? Will the trustee still take possession of the home regardless? What will be the impact on my partner? Will she also be forced into bankruptcy, even though she has no default on any loan?

Thanks in advance.


Well-Known Member
25 April 2014
Hi @iseekjustice
Which state or territory are you located in?
Is the company not willing to negotiate a payment plan or a reduction to manage your debt?

Sarah J

Well-Known Member
16 July 2014
Melbourne, Victoria
Hi iseekjustice,

I would invite you to read this thread on lawanswers: Declaring bankruptcy - will I lose the house?

In short, unless the item is 'exempted' under Section 116 of the Bankruptcy Act 1966 (Cth), if you have an interest in the item/property/asset, your creditors can access this. Where a property is jointly owned by someone who is not included in the bankruptcy, they will be given an opportunity to purchase the other person's interests in the property first (after which, they will own the property in full and bear all responsibilities and rights in that property), before creditors claim it. If not, the property will likely be sold and proceeds will be divided between the non-bankruptcy co-owner and the creditors of the other co-owner.

Hope this answers your question.