NSW Bankruptcy - What to Do if Still Guarantor on Mortgage?

[Roses1]

I am bankrupt. My ex and I had two properties in a family law property settlement.
One property was guaranteed against the other, with me as guarantor.
Both properties were disclosed to the bankruptcy trustee.
My ex sold the guaranteed property and the mortgage is discharged. Half the proceeds went to ex himself and the other half paid towards the other property I am guarantor on reducing the original loan. I just found out that the mortgage is still current with a redraw available to the ex of $160,000
I have not been released as guarantor. I am aware that he is able to keep the property as he is paying the current mortgage on time.

But, can he turn around and at the end of my bankruptcy, which is only 18 months away, withdraw the $160,000 available to him in the redraw, leaving me then liable for that outstanding debt? Or, any debt left over from a forced sale? As it appears he is allowing the home to fall into disrepair and any sale proceed achieved would be significantly less than the outstanding mortgage.

 

[Tracy B]

Hi Roses1,

First, you need to tell the bank (mortgagee) that you are declared bankrupt and that this will end in 18 months. Second, as guarantor, you will only be liable for repayments when the primary debtor (your ex partner) defaults on the loan. If you are worried he will withdraw and then default, leaving you to clean up the less, you can contact the bank and request to be released from the guarantee agreement due to change of circumstances and relationship with the primary debtor.

Give that a try first and see what happens.