Bankruptcy Gold Coast is a challenging
process, but I know from meeting with thousands facing the prospect of
bankruptcy over the years, that not much concerns people more than the thought
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 basis.
Will you lose your home if you go bankrupt?
The response is a resounding maybe. (not very useful, I know) People generally
imagine it's an inevitable consequence and a part of Bankruptcy, and hence 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 Gold Coast
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 clearer picture.
The purpose of the bankruptcy trustee is to
firstly abide by the regulation of the bankruptcy act 1966 (it's a very dry
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 done in a
bunch of various ways but it mainly comes down to income and assets. The
trustees role is to collect payments beyond your income threshold. The other
role is to sell any assets that can contribute to repaying your debts.
What this seems is that yes the trustee
will sell your house right? Not always. The only reason the trustee will sell
any asset including your house is to get money to repay your debts. If there is
no equity on your property then it's pointless to sell your home. This is
happening increasingly since the GFC as house prices in many regions have been
heading south so what you paid 4 years ago may not actually reflect the price
today.
A quick word of advice here if you have a
house in Gold Coast and are looking at Bankruptcy: get a specialist to help you
through this process, there are plenty of variables in these scenarios that
have 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 generating good
money every month in interest out of you, month in month out, so long as you
keep up to date with your payments then the bank really wants you in there at all
costs. Essentially 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 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 provide 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 property, make sure 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. 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 real 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, and then you can easily build your
equity position. The second thing is, your property may be worth far more than
you thought. Get some suggestions before carrying this out. The number of times
I've met with clients that have sold their family home of 20 years just to find
out I could of helped them keep it; unfortunately this happens all too often
When it concerns Bankruptcy and houses,
another big consideration is ownership, often 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 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 likely when it comes to the family
home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the
home in bankruptcy also. I need to repeat this but get some help on this area
of Bankruptcy because it is very tricky and every 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 Gold Coast on 1300 795 575, or visit
our website: www.bankruptcyexpertsGoldCoast.com.au.
