Bankruptcy Townsville is a complex
process, but I know from meeting with thousands facing the likelihood of
bankruptcy over the years, that practically nothing worries people more than
the notion of losing the family house. Almost every person is psychologically connected
to their home - it's where the kids have grown up, it's where you appreciate
life on a day to day basis.
Will you lose your home if you go bankrupt?
The reply is a resounding maybe. (not very helpful, I know) People generally
imagine it's an inevitable consequence and a part of Bankruptcy, and as a
result 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 agreed to pay back the debt you are in.
So how is it possible to keep my Townsville
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 more clear image.
The purpose of the bankruptcy trustee is to
firstly agree to the regulation of the bankruptcy act 1966 (it's a very dull
read about 600 pages if you are curious).
Within that regulatory framework, the
trustee is to help recover monies owed to your creditors, that is accomplished
in a bunch of various 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
off any asset including your house is to get money to repay your debts. If
there is no equity in your home then it's pointless to sell your home. This is
happening more and more since the GFC as house prices in many locations have
been heading south so what you paid 4 years ago may not actually reflect the
price today.
A quick word of advice here if you have a
house in Townsville and are looking at Bankruptcy: get a professional to help
you through this process, there are loads of variables in these scenarios that
have to be considered.
You might wonder, why would the bank want
bankrupt customers? wouldn't they prefer to sell your house and not take the
risk? The bank that has kindly lent you the money for your house is making good
money every month in interest out of you, month in month out, just as long as
you keep up to date with your repayments then the bank wants you in there at
all costs. Ultimately however it's not the bank's call if the trustee
determines that there is ample 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 note the value of your house and the portion you owe on the house. A tip if
you are trying to work out the value of your house: use a registered valuer as
this will give you peace of mind, don't use your neighbours' gut feel tips or a
real estate agents advice to come to this figure. When you get a valuer out to
your house, make certain you tell the valuer to value the property for a quick
sale, see to it 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 the
house in the next 30 days you may control the result. The idea is that you want
a real sell now figure.
There are two main reasons this valuation
system is critical to you: one you can have peace of mind ascertaining the
market value of your house, and afterwards you can easily develop your equity
position. Secondly, your house may be really worth a lot more than you thought.
Get some assistance before doing this. The number of times I've seen clients
that have sold their family home of 20 years just to find out I could of helped
them keep it; unfortunately this happens all too often
When it concerns Bankruptcy and houses,
another serious consideration is ownership, in many cases houses are bought in
joint names. To puts it simply 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 comes down to Bankruptcy, this is
just one of possibly hundreds of scenarios that are possible when it relates to
the family home. Bear in mind the non-bankrupt party can buy the bankrupt's
part of the home in bankruptcy also. I need to repeat this but get some help on
this area of Bankruptcy because it is very tricky and every case is different.
If you need 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 Townsville on 1300 795 575, or visit our website:
www.bankruptcyexpertsTownsville.com.au.
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