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VIC Credit Card Debt and Bankruptcy - Resign as Appointor of Trust?

Discussion in 'Debt and Bankruptcy Law Forum' started by Dom Deacon, 22 September 2015.

  1. Dom Deacon

    Dom Deacon Member

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    I was looking into some trust documents today for a trust I'm the director of. I came across this clause: "any appointor who becomes bankrupt or is the object of an order for the sequestration of his or her estate will be deemed to have resigned as an appointor".

    The appointor of the trust has built up credit card debts of $30,000. The bank was unable to recover this money as he had no assets, no income and no way to pay it. I'm told the term used was he was "beyond judgement" due to his inability to pay.

    That seems equivalent to me to bankruptcy. Would he be considered to have resigned as appointor?
     
  2. James D. Ford - Solicitor

    James D. Ford - Solicitor Well-Known Member

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    Hi Dom

    I'd need to see the Trust Deed before confirming the position, as the Trust Deed may have it's own specific definition of the term "Bankruptcy".
    Based on the Bankruptcy legislation definition, my assumption is that the bank decided that even though it had a Court judgement against the appointor (if this was the case), it was not worth it commercially to spend any more money commencing the Bankruptcy process, so they have let it go, and decided to do nothing further.

    Therefore, he would still be an appointor of the trust, as he has not become "Bankrupt".

    Kind regards
     

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