Bankruptcy Bunbury is a tricky process,
but I know from meeting with thousands facing the prospect of bankruptcy over
the years, that very little troubles people more than the notion of losing the
family home or apartment. Almost everybody is sentimentally connected to their
home - it's where the kids have grown, it's where you enjoy life on a day to
day basis.
Will you lose your home if you go bankrupt?
The solution is a resounding maybe. (not very useful, I know) People typically
feel that it's an inevitable consequence and a part of Bankruptcy, and hence
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 perk of Debt Agreements and
Personal Insolvency Agreements is you can keep your house. The reason is
simple: you've accepted to pay back the debt you are in.
So how is it possible to keep my Bunbury
house, you ask? It's easier if I explain the basic concept behind the Bankruptcy
process as administered by the trustee, then you'll have a more clear idea.
The duty 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 serious).
Within that regulatory framework, the
trustee is to help recuperate monies owed to your creditors, that is executed
in a bunch of diverse ways but it mainly comes down to income and assets. The
trustees role is to collect payments beyond your income threshold. The further
role is to sell off any assets that can contribute to paying back your debts.
What this resembles 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 increasingly more since the GFC as house prices in many regions have
been heading south so what you paid 4 years ago may not automatically reflect
the price today.
A quick tip here if you have a house in
Bunbury and are looking at Bankruptcy: get a skilled professional to help you
through this process, there are plenty of variables in these scenarios that
should 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 creating good
money every month in interest out of you, month in month out, so long as you
keep up to date with your payments then the bank really wants you in there at
all costs. Ultimately however it's not the bank's call if the trustee
establishes that there is loads 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 mark the value of your house and the quantity 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 offer you peace of mind, don't use your neighbours' gut feel
advice or a real estate agents advice to get to this figure. When you get a
valuer out to your property, ensure that you tell the valuer to value the
property for a quick sale, make sure you mow the lawn and don't leave the
kitchen in a mess also.
Valuers used to offer two valuations: one
for a quick sale and one for a well marketed non time sensitive sale. These
days that's not the case, but if you meet them and let them know you need to
sell your home in the next 30 days you may control the result. The idea is that
you want a life-like sell now figure.
There are two reasons this valuation
technique is critical to you: one you may have peace of mind ascertaining the
market value of your house, and after that you can easily develop your equity
position. Secondly, your home may be worth far more than you thought. Get some
advice before doing this. The number of times I've met clients that have sold
their family home of 20 years simply to find out I could of helped them keep
it; unfortunately this happens all too often
When it comes to Bankruptcy and houses,
another significant consideration is ownership, in most cases houses are bought
in joint names. In other words 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 concerns Bankruptcy, this is just
one of potentially numerous scenarios that are possible when it relates to the
family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion
of the house in bankruptcy also. I need to repeat this but get some advice on
this area of Bankruptcy because it is very tricky and each and every case is
different.
If you really want to learn more about what
to do, where to turn and what questions to ask about Bankruptcy, then feel free
to talk to Bankruptcy Experts Bunbury on 1300 795 575, or visit our website:
www.bankruptcyexpertsBunbury.com.au.
