Thursday, August 11 2022

In 2022, the Strata Bonded Strata company, on behalf of the owners’ corporation, moved to collect the debt by forcing the couple to file for bankruptcy in the Federal Circuit and Family Court of Australia.

Bonded Strata said The Herald of the Sun he had instructions from his client not to comment due to pending legal proceedings.

The couple have lived in the Earlwood apartment for 50 years. Credit:steven siewert

Khalil said the couple won a six-week reprieve from bankruptcy proceedings at the end of June. But if they can’t exchange contracts with a buyer within that time, there will be bankruptcy and liquidation.

“If the bankruptcy proceeds, they will be homeless,” says Khalil. “The trustees will come in and just sell it for peanuts. They just have to sell it for more than the debt and attorney’s fees, which is growing by the day and is around $44,000 now. In addition, there would be tens of thousands of trustee charges. That’s not a good result.”

The Tzavellases purchased their Earlwood unit in the inner west for $22,200 in 1972.

On paper, the median price for a unit in Earlwood is $777,000, but the couple is trying to sell in a falling market, and the property already went up for auction in June with no registered bidders.

Financial Counseling Australia policy and campaign director Lauren Levin said an analysis of bankruptcies in the 2018-2019 financial year found that 12 per cent of all bankruptcy filings were from owner corporations.

“I’m sure most people don’t realize how common bankruptcies initiated by corporate entities are and would be surprised that such a slick approach to debt collection is being used, when there are other much better options,” Levin said.

Jane Foley, a senior attorney at the Financial Rights Law Center, said it was probably even higher. She had a colleague review a court list in Sydney last Thursday, and they found that a third of the lists were bodies of strata bankrupting people.

Charging

Meanwhile, the couple struggle with health problems, with Nitsa being the sole caregiver for Spiros, who has been incapacitated by three strokes, the most recent earlier this year.

Foley said that owner corporations and strata companies had other ways to deal with debt in cases of financial hardship.

The first option is a payment plan that is affordable for the owner. The second option is to borrow to cover the owner’s share and put a warning on the property, so that the debt is eventually recovered when the property is finally sold.

Foley said the bankruptcy threshold was currently $10,000, but consumer advocates were pushing to raise it to $50,000.

Khalil said the law should change to protect elderly retirees from bankruptcies initiated by the strata.

Charging

Levin said: “This story shows the callous disregard of a corporation of owners and the lack of informed regulations on hardship despite government reviews.

“How did they expect 80-year-old retirees to raise $20,000? Are they expected to rob a bank or not eat for the year?

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