Bankruptcy Geelong is a difficult to
understand process, but I know from meeting with thousands facing the
likelihood of bankruptcy over the years, that virtually nothing concerns people
more than the idea of losing the family house. Almost every person is on an emotional
level connected to their home - it's where the children have grown up, it's
where you enjoy 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 typically
assume 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 Geelong
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 duty of the bankruptcy trustee is to
firstly agree to the regulation of the bankruptcy act 1966 (it's a very dry
read about 600 pages if you are intrigued).
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 other 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 normally. 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 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 automatically reflect the
price today.
A quick tip here if you have a house in
Geelong 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
have to be considered.
You might wonder, why would the bank want
bankrupt customers? wouldn't they need 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, provided that you
keep up to date with your repayments then the bank really wants you in there at
all costs. Essentially however it's not the bank's call if the trustee
establishes that there is a lot 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 put down the value of your house and the amount 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 give you peace of mind, don't use your neighbours' gut feel
suggestions or a real estate agents advice to reach this figure. When you get a
valuer out to your home, make sure you tell the valuer to value the property
for a quick sale, make certain 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 delicate sale. These days
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 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 can have peace of mind ascertaining the
market value of your house, and afterwards you can easily develop your equity
position. Secondly, your property may be really worth a lot more than you
thought. Get some tips before doing this. The number of times I've met clients
that have sold their family home of 20 years simply to learn I could of helped
them keep it; unfortunately this happens all too often
When it comes to Bankruptcy and houses,
another serious consideration is ownership, in most cases houses are purchased
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 to Bankruptcy, this is just
one of probably hundreds of scenarios that are likely when it relates 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 would like to learn more about what
to do, where to turn and what questions to ask about Bankruptcy, then feel free
to reach out to Bankruptcy Experts Geelong on 1300 795 575, or visit our
website: www.bankruptcyexpertsGeelong.com.au.
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