Bankruptcy Port Macquarie is a difficult
process, but I know from meeting with thousands facing the prospect of
bankruptcy over the years, that nothing at all concerns people more than the
idea of losing the family home. Almost every person is emotionally connected to
their home - it's where the children have grown, it's where you appreciate life
on a day to day base.
Will you lose your house if you go
bankrupt? The answer is a resounding maybe. (not very useful, I know) People
typically feel it's an inevitable consequence and a part of Bankruptcy, and
because of this 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 benefit 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 Port
Macquarie 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 idea.
The purpose of the bankruptcy trustee is to
firstly agree to the regulation of the bankruptcy act 1966 (it's a very plain
read about 600 pages if you are eager).
Within that regulatory framework, the
trustee is to help recuperate monies owed to your creditors, that is carried
out 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
further role is to sell any assets that can contribute to paying your debts.
What this seems like 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 pay back your
debts. If there is no equity in your home then it's pointless to sell your
home. This is happening increasingly more since the GFC as house prices in many
areas have been heading south so what you paid 4 years ago may not actually
reflect the price today.
A quick tip here if you have a house in
Port Macquarie and are looking at Bankruptcy: get an expert 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 like to sell your house and not take the
risk? The bank that has generously lent you the money for your house is
creating good money every month in interest out of you, month in month out,
provided that you keep up to date with your fees then the bank wants you in
there at all costs. Ultimately however it's not the bank's call if the trustee
establishes that there is plenty 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 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
suggestions or a real estate agents advice to arrive at this figure. When you
get a valuer out to your home, ensure that 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 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 sensible sell now figure.
There are two reasons this valuation
technique is critical to you: one you may have peace of mind ascertaining the
market value of your house, and after that you can easily establish your equity
position. Second of all, your property may be worth much more than you thought.
Get some guidance before doing this. The number of times I've seen clients that
have sold their family home of 20 years simply to find 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, often 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 likely numerous scenarios that are likely when it relates to the
family home. Bear in mind the non-bankrupt party can buy the bankrupt's part 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 single 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 get in touch with Bankruptcy Experts Port Macquarie on 1300 795 575, or
visit our website: www.bankruptcyexpertsPortMacquarie.com.au.
