Bankruptcy Sunshine Coast is a tricky
process, but I know from meeting with thousands facing the likelihood of
bankruptcy over the years, that absolutely nothing concerns people more than
the idea of losing the family home. Almost everyone is sentimentally connected
to their home - it's where the children have grown up, it's where you take
pleasure in life on a day to day base.
Will you lose your house if you go
bankrupt? The response is a resounding maybe. (not very helpful, I know) People
typically presume 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 strength 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 Sunshine
Coast house, you ask? It's easier if I explain the basic concept 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 agree to the regulation of the bankruptcy act 1966 (it's
a very dull read about 600 pages if you are serious).
Within that regulatory framework, the
trustee is to help recover monies owed to your creditors, that is executed in a
bunch of diverse 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 normally. 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 increasingly since the GFC as house prices in many locations have
been heading south so what you paid 4 years ago may not really reflect the
price today.
A quick tip here if you have a house in
Sunshine Coast and are looking at Bankruptcy: get a professional 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 clients? wouldn't they hope to sell your house and not take the risk?
The bank that has kindly lent you the money for your house is creating good
money every month in interest out of you, month in month out, so long as you
keep up to date with your fees then the bank really wants you in there at all
costs. Ultimately however it's not the bank's call if the trustee decides 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 put down 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
recommendations or a real estate agents advice to reach this figure. When you
get a valuer out to your property, see to it 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 give 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 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 system
is critical to you: one you will definitely have peace of mind ascertaining the
market value of your house, and afterwards you can easily build your equity
position. The second thing is, your home may be really worth much more than you
thought. Get some advice before carrying this out. The number of times I've met
with clients that have sold their family home of 20 years just to figure 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
doesn't, the equity is only factored on the 50 % of the property.
When it concerns Bankruptcy, this is just
one of possibly hundreds of scenarios that are possible when it comes down 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
guidance 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 Fresh Start Solutions Sunshine Coast on 1300 818 575, or visit our
website: www.freshstartsolutions.com.au/bankruptcy-SunshineCoast
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