Bankruptcy Toowoomba is a difficult
process, but I know from meeting with thousands facing the prospect of
bankruptcy over the years, that absolutely nothing concerns people more than
the notion of losing the family home. Almost every person is sentimentally connected
to their home - it's where the kids have grown up, it's where you take pleasure
in life on a day to day basis.
Will you lose your house if you go
bankrupt? The response is a resounding maybe. (not very useful, I know) People
generally think 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 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 Toowoomba
house, you ask? It's easier if I explain the basic principle behind the Bankruptcy
process as administered by the trustee, then you'll have a more clear image.
The responsibility of the bankruptcy
trustee is to firstly comply with the regulation of the bankruptcy act 1966
(it's a very boring 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 done in a
bunch of various 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 any assets that can contribute to repaying your debts.
What this sounds like is that yes the
trustee will sell your house right? Not necessarily. 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 home 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 actually
reflect the price today.
A quick tip here if you have a house in
Toowoomba and are looking at Bankruptcy: get an expert to help you through this
process, there are plenty of variables in these scenarios that need to 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 nicely lent you the money for your house is creating
good money every month in interest out of you, month in month out, provided you
keep up to date with your payments 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 loads 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 document the value of your house and the level you owe on the house. A tip
if you are attempting 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
tips or a real estate agents advice to come to this figure. When you get a
valuer out to your house, make certain you tell the valuer to value the
property for a quick sale, make sure 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. 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 real sell now figure.
There are two main reasons this valuation
technique is critical to you: one you will likely have peace of mind
ascertaining the market value of your house, and afterwards you can easily
create your equity position. Second of all, your property may be worth even
more than you thought. Get some assistance before doing this. The amount of
times I've met with clients that have sold their family home of 20 years just
to learn 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 acquired in
joint names. In other words 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 involves Bankruptcy, this is just
one of possibly numerous scenarios that are possible when it comes to the
family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion
of the property in bankruptcy also. I have to repeat this but get some
assistance on this area of Bankruptcy because it is very tricky and every
single case is different.
If you need 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 Toowoomba on 1300 795 575, or visit our
website: www.bankruptcyexpertsToowoomba.com.au.
