Bankruptcy Brisbane is a confusing
process, but I know from meeting with thousands facing the possibility of
bankruptcy over the years, that virtually nothing troubles people more than the
idea of losing the family house. Almost every person is emotionally connected
to their home - it's where the children have grown up, it's where you enjoy
life on a day to day base.
Will you lose your home if you go bankrupt?
The answer is a resounding maybe. (not very helpful, I know) People generally
assume 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 Brisbane
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 picture.
The responsibility 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 eager).
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 further
role is to sell off any assets that can contribute to fixing your debts.
What this seems like is that yes the
trustee will sell your house right? Not necessarily. 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 home then it's pointless to sell your
home. This is happening increasingly 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 tip here if you have a house in
Brisbane and are looking at Bankruptcy: get a professional to help you through
this process, there are a lot of variables in these scenarios that should be
considered.
You might wonder, why would the bank want
bankrupt customers? wouldn't they want 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, just as long
as you keep up to date with your repayments 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 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 mark the value of your house and the level 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 tips
or a real estate agents advice to come to this figure. When you get a valuer
out to your property, make certain 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. Nowadays
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 control the result. The idea is that you
want a realistic sell now figure.
There are two reasons this valuation
technique is critical to you: one you will certainly have peace of mind
ascertaining the market value of your house, then afterwards you can easily set
up your equity position. Second of all, your property may be really worth even
more than you thought. Get some suggestions before doing this. The number of
times I've met clients that have sold their family home of 20 years just to
discover 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. 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 doesn't, the equity is only factored on the 50 % of the property.
When it comes to Bankruptcy, this is just
one of possibly numerous scenarios that are likely 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 should repeat this but get some assistance on this
area of Bankruptcy because it is very tricky and every single 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
contact Bankruptcy Advice Brisbane on 1300 879 867, or visit our website:
www.bankruptcy-advice.com.au/Brisbane.
