In 2022, Bonded Strata, on behalf of the owners’ company, decided to collect the debt by forcing the couple into bankruptcy in the Federal Circuit and Family Court of Australia.
Bonded Strata says The Herald of the Sun she was instructed by her client not to comment due to ongoing legal proceedings.
Khalil said the couple were granted a six-week stay in bankruptcy proceedings in late June. But if they cannot exchange contracts with a buyer within this period, there will be bankruptcy and a clearance sale.
“If the bankruptcy continues, they will become homeless,” says Khalil. “The administrators will come in and they will just sell it for peanuts. They just have to sell it for more than debt and attorney fees, which are increasing day by day and currently stand at around $44,000. In addition, there would be tens of thousands of trustee charges. It’s not a good result.
The Tzavellas bought their unit in Earlwood in the Midwest for $22,200 in 1972.
On paper, the median price for a unit in Earlwood is $777,000, but the couple are trying to sell in a down market, and the property previously sold at auction in June with no registered bidders.
Financial Counseling Australia’s director of policy and campaigns, Lauren Levin, said an analysis of bankruptcies in the 2018-19 financial year found that 12% of all bankruptcy claims came from landlord companies. .
“I’m sure most people don’t realize how common corporate-initiated bankruptcies are and would be shocked to see such an approach to debt collection being used, when there are other far better options. “, said Levin.
Jane Foley, senior counsel at the Financial Rights Legal Centre, said it was likely even higher. She asked a colleague to check a hearing list in Sydney last Thursday, and they discovered that a third of the lists were diaper bodies bankrupting individuals.
Meanwhile, the couple are struggling with their health, with Nitsa being the sole carer for Spiros, who was incapacitated by three strokes, the most recent earlier this year.
Foley said landlord corporations and condominium corporations have other ways to manage their debts in times of financial difficulty.
The first option is an affordable homeowner payment plan. The second option is to borrow to cover the owner’s share and caution against the property, so that the debt is ultimately collected when the property is finally sold.
Foley said the bankruptcy threshold is currently $10,000, but consumer advocates are pushing to raise it to $50,000.
Khalil said the law should change to protect older retirees from strata-initiated bankruptcies.
Levin said: ‘This story shows the callous indifference of a landlord society and the lack of regulations that accommodate hardship despite government reviews.
“How did they expect 80-year-old retirees to raise $20,000? Are they supposed to rob a bank or not eat for the year? »
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