Bankruptcy Bundaberg is a complex
process, but I know from meeting with thousands facing the chance of bankruptcy
over the years, that almost nothing troubles people more than the notion of
losing the family home. Almost every person is emotionally connected to their
home - it's where the kids have grown up, it's where you appreciate life on a
day to day base.
Will you lose your home if you go bankrupt?
The answer is a resounding maybe. (not very helpful, I know) People typically
assume it's an inevitable consequence and a part of Bankruptcy, and therefore
push themselves to the brink of insanity to not lose the family home. But when
it comes to the whole process of Bankruptcy, a key benefit of Debt Agreements
and Personal Insolvency Agreements is you can keep your house. The reason is
simple: you've agreed to pay back the debt you are in.
So how is it possible to keep my Bundaberg
house, you ask? It's easier if I explain the basic principle behind the Bankruptcy
process as administered by the trustee, then you'll have a clearer picture.
The purpose of the bankruptcy trustee is to
firstly comply with the regulation of the bankruptcy act 1966 (it's a very dull
read about 600 pages if you are wondering).
Within that regulatory framework, the
trustee is to help recover monies owed to your creditors, that is executed in a
bunch of assorted ways but it mainly comes down to income and assets. The
trustees role is to collect payments over your income threshold. The further
role is to sell any assets that can contribute to paying back your debts.
What this seems is that yes the trustee
will sell your house right? Not always. The only reason the trustee will sell
any asset including your house is to get money to repay your debts. If there is
no equity in your house then it's pointless to sell your home. This is
happening much more since the GFC as house prices in many areas have been
heading south so what you paid 4 years ago may not automatically reflect the
price today.
A quick word of advice here if you have a
house in Bundaberg and are looking at Bankruptcy: get a skilled professional to
help you through this process, there are a lot of variables in these scenarios
that have to be considered.
You might wonder, why would the bank want
bankrupt clients? wouldn't they hope to sell your house and not take the risk?
The bank that has nicely lent you the money for your house is making good money
every month in interest out of you, month in month out, provided that you keep
up to date with your payments then the bank desires you in there at all costs.
Ultimately however it's not the bank's call if the trustee determines that
there is plenty of equity in your house the trustee will force you and the bank
to sell the house.
When you file for bankruptcy you are asked
to write down the value of your house and the amount you owe on the house. A
tip if you are attempting to work out the value of your house: use a registered
valuer as this will provide you peace of mind, don't use your neighbours' gut
feel suggestions or a real estate agents advice to arrive at this figure. When
you get a valuer out to your home, ensure that you tell the valuer to value the
property for a quick sale, ensure you mow the lawn and don't leave the kitchen
in a mess also.
Valuers used to provide two valuations: one
for a quick sale and one for a well marketed non time sensitive sale. Nowadays
that's not the case, but if you meet them and tell them you need to sell your
home in the next 30 days you may sway the result. The idea is that you want a
sensible sell now figure.
There are two reasons this valuation
technique is critical to you: one you will definitely have peace of mind
ascertaining the market value of your house, then afterwards you can easily
build your equity position. Secondly, your home may be really worth a lot more
than you thought. Get some tips before doing this. The amount of times I've met
clients that have sold their family home of 20 years only to find out I could
of helped them keep it; unfortunately this happens all too often
When it comes to Bankruptcy and houses,
another major consideration is ownership, in most cases houses are bought in
joint names. Simply put a couple may be a house 50/50 using both incomes to
make the payments. If one party declares bankruptcy and the other party does
not, the equity is only factored on the 50 % of the property.
When it relates to Bankruptcy, this is just
one of likely hundreds of scenarios that are possible when it comes down to the
family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion
of the home in bankruptcy also. I should repeat this but get some information
on this area of Bankruptcy because it is very tricky and each and every case is
different.
If you want to learn more about what to do,
where to turn and what questions to ask about Bankruptcy, then feel free to
speak to Bankruptcy Experts Bundaberg on 1300 795 575, or visit our website:
www.bankruptcyexpertsBundaberg.com.au.
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