Bankruptcy Sunshine Coast is a tricky
process, but I know from meeting with thousands facing the possibility of
bankruptcy over the years, that nothing worries people more than the thought of
losing the family home. Almost every person is sentimentally 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 home if you go bankrupt?
The response is a resounding maybe. (not very useful, I know) People generally
feel that 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 Sunshine
Coast house, you ask? It's easier if I explain the basic theory behind the Bankruptcy
process as administered by the trustee, then you'll have a more clear image.
The function of the bankruptcy trustee is
to firstly abide by the regulation of the bankruptcy act 1966 (it's a very
boring 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 carried out
in a bunch of distinct ways but it mainly comes down to income and assets. The
trustees role is to collect payments over and above your income threshold. The
other role is to sell any assets that can contribute to repaying your debts.
What this sounds like 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 pay back your
debts. If there is no equity in your home then it's pointless to sell your
home. This is happening much 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
Sunshine Coast and are looking at Bankruptcy: get an expert 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 generously lent you the money for your house is making good
money every month in interest out of you, month in month out, as long as you
keep up to date with your monthly payments then the bank wants you in there at
all costs. Essentially however it's not the bank's call if the trustee
determines 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 make a note of the value of your house and the quantity you owe on the
house. A tip if you are aiming 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 house, make certain 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 give 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 realistic sell now figure.
There are two main 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
develop your equity position. Secondly, your property may be worth a lot more
than you thought. Get some tips before carrying this out. The number of times
I've met clients that have sold their family home of 20 years simply to figure
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
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 does not, the equity is only factored on the 50 % of the property.
When it comes down to Bankruptcy, this is
just one of potentially numerous scenarios that are possible when it comes 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
guidance 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 Sunshine Coast on 1300 795 575, or visit our
website: www.bankruptcyexpertsSunshineCoast.com.au.
