Bankruptcy Tamworth is a challenging
process, but I know from meeting with thousands facing the possibility of
bankruptcy over the years, that practically nothing worries people more than
the idea of losing the family home. Almost everybody is on an emotional level
connected to their home - it's where the kids have grown, it's where you
appreciate life on a day to day base.
Will you lose your home if you go bankrupt?
The answer 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 advantage 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 Tamworth
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 clearer picture.
The duty of the bankruptcy trustee is to
firstly abide by the regulation of the bankruptcy act 1966 (it's a very plain
read about 600 pages if you are wondering).
Within that regulatory framework, the
trustee is to help recover monies owed to your creditors, that is executed in a
bunch of different 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 repay your debts.
If there is no equity in your house then it's pointless to sell your home. This
is happening much more since the GFC as house prices in many locations have
been heading south so what you paid 4 years ago may not automatically reflect
the price today.
A quick word of advice here if you have a
house in Tamworth and are looking at Bankruptcy: get an expert to help you
through this process, there are a lot of variables in these scenarios that need
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 generating
good money every month in interest out of you, month in month out, provided
that you keep up to date with your payments 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 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 mark 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 provide you peace of mind, don't use your neighbours' gut feel
suggestions or a real estate agents advice to come to 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, see to it 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 delicate sale. These days
that's not the case, but if you meet them and tell them you need to sell your
home 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
process is critical to you: one you will definitely have peace of mind
ascertaining the market value of your house, and after that you can easily
develop your equity position. The second thing is, your property may be really
worth a lot more than you thought. Get some guidance before carrying this out.
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 major consideration is ownership, in many cases houses are bought 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 relates to Bankruptcy, this is just
one of likely numerous scenarios that are likely when it comes down to the
family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion
of the house in bankruptcy also. I have to repeat this but get some help on
this area of Bankruptcy because it is very tricky and every case is different.
If you want 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 Tamworth on 1300 795 575, or visit our website:
www.bankruptcyexpertsTamworth.com.au.
