Bankruptcy Mackay is a complicated
process, but I know from meeting with thousands facing the likelihood of
bankruptcy over the years, that almost nothing troubles 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 kids have grown up, it's where you appreciate
life on a day to day basis.
Will you lose your home if you go bankrupt?
The answer is a resounding maybe. (not very helpful, I know) People generally
think 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 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 Mackay
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 picture.
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 intrigued).
Within that regulatory framework, the
trustee is to help recuperate monies owed to your creditors, that is
accomplished in a bunch of different ways but it mainly comes down to income
and assets. The trustees role is to collect payments over and above your income
threshold. The further role is to sell off any assets that can contribute to
paying 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 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 always
reflect the price today.
A quick word of advice here if you have a
house in Mackay and are looking at Bankruptcy: get an expert to help you
through this process, there are lots of variables in these scenarios that have
to be considered.
You might wonder, why would the bank want
bankrupt clients? 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 making good
money every month in interest out of you, month in month out, provided you keep
up to date with your monthly payments then the bank wants you in there at all
costs. Ultimately however it's not the bank's call if the trustee figures out
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 make a note of the value of your house and the amount of money 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 tips or a real estate agents advice to get to this figure.
When you get a valuer out to your home, 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
the house in the next 30 days you may sway the result. The idea is that you
want a reasonable sell now figure.
There are two reasons this valuation
technique is critical to you: one you are going to have peace of mind
ascertaining the market value of your house, then afterwards you can easily
establish your equity position. Secondly, your house may be really worth far
more than you thought. Get some advice before doing this. The amount of times
I've met with 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 concerns Bankruptcy and houses,
another notable consideration is ownership, in most cases houses are purchased
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
doesn't, the equity is only factored on the 50 % of the property.
When it comes down to Bankruptcy, this is
just one of probably 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 need to repeat this but get some advice on
this area of Bankruptcy because it is very tricky and every single case is
different.
If you really 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 Mackay on 1300 795 575, or visit our website:
www.bankruptcyexpertsMackay.com.au.
