Bankruptcy Rockhampton is a tricky
process, but I know from meeting with thousands facing the possibility of
bankruptcy over the years, that not a thing troubles people more than the idea
of losing the family home or apartment. Almost everyone is on an emotional level
connected to their home - it's where the kids have grown, it's where you take
pleasure in life on a day to day basis.
Will you lose your house if you go
bankrupt? The reply is a resounding maybe. (not very helpful, I know) People
typically feel it's an inevitable consequence and a part of Bankruptcy, and
consequently 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
Rockhampton house, you ask? It's easier if I explain the basic idea behind the Bankruptcy
process as administered by the trustee, then you'll have a more clear image.
The responsibility 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 eager).
Within that regulatory framework, the trustee
is to help recover monies owed to your creditors, that is carried out in a
bunch of distinct ways but it mainly comes down to income and assets. The
trustees role is to collect payments beyond your income threshold. The other
role is to sell any assets that can contribute to paying back your debts.
What this sounds like is that yes the
trustee will sell your house right? Not normally. The only reason the trustee
will sell any asset including your house is to get money to pay back your
debts. If there is no equity in your house then it's pointless to sell your
home. This is happening more and more since the GFC as house prices in many
areas have been heading south so what you paid 4 years ago may not necessarily
reflect the price today.
A quick tip here if you have a house in
Rockhampton and are looking at Bankruptcy: get a qualified professional to help
you through this process, there are a number of variables in these scenarios
that should 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 generously 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 fees then the bank desires you in there at all
costs. Ultimately however it's not the bank's call if the trustee decides that
there is lots 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 note the value of your house and the portion 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 give you peace of mind, don't use your neighbours' gut feel
recommendations or a real estate agents advice to get to this figure. When you
get a valuer out to your property, see to it 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 provide 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 sway the result. The idea is that
you want a realistic sell now figure.
There are two main reasons this valuation
system is critical to you: one you may have peace of mind ascertaining the
market value of your house, and afterwards you can easily create your equity
position. Secondly, your house may be really worth a lot more than you thought.
Get some assistance before carrying this out. The amount 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 major consideration is ownership, in most cases houses are acquired 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
doesn't, the equity is only factored on the 50 % of the property.
When it comes to Bankruptcy, this is just
one of potentially 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
portion of the house in bankruptcy also. I need to repeat this but get some
information on this area of Bankruptcy because it is very tricky and every case
is different.
If you wish to learn more about what to do,
where to turn and what questions to ask about Bankruptcy, then feel free to
speak with Bankruptcy Experts Rockhampton on 1300 795 575, or visit our
website: www.bankruptcyexpertsRockhampton.com.au.
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