Bankruptcy Dubbo is a tricky process,
but I know from meeting with thousands facing the likelihood of bankruptcy over
the years, that not much worries people more than the notion of losing the
family home. Almost everyone is sentimentally connected to their home - it's
where the kids have grown, it's where you enjoy life on a day to day basis.
Will you lose your home if you go bankrupt?
The solution is a resounding maybe. (not very useful, I know) People generally
assume it's an inevitable consequence and a part of Bankruptcy, and therefore
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 Dubbo
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 picture.
The job of the bankruptcy trustee is to
firstly agree to the regulation of the bankruptcy act 1966 (it's a very boring
read about 600 pages if you are wondering).
Within that regulatory framework, the
trustee is to help recuperate monies owed to your creditors, that is carried
out in a bunch of assorted 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 any assets that can contribute to paying 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 off any asset including your house is to get money to pay back your
debts. If there is no equity on your property 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 necessarily
reflect the price today.
A quick word of advice here if you have a
house in Dubbo and are looking at Bankruptcy: get a qualified professional to
help you through this process, there are loads of variables in these scenarios
that have to be considered.
You might wonder, why would the bank want
bankrupt clients? wouldn't they need to sell your house and not take the risk?
The bank that has generously lent you the money for your house is making good
money every month in interest out of you, month in month out, just as long as
you keep up to date with your monthly payments then the bank really wants you
in there at all costs. Ultimately however it's not the bank's call if the
trustee determines 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 note the value of your house and the amount 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 offer you peace of mind, don't use your neighbours' gut feel
suggestions or a real estate agents advice to get to this figure. When you get
a valuer out to your house, 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 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 tell them you need to sell the
house in the next 30 days you may control the result. The idea is that you want
a sensible sell now figure.
There are two main reasons this valuation
process is critical to you: one you will likely have peace of mind ascertaining
the market value of your house, and after that you can easily set up your
equity position. The second thing is, your home may be really worth much 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 figure
out I could of helped them keep it; unfortunately this happens all too often
When it comes to Bankruptcy and houses,
another primary consideration is ownership, in many cases houses are bought 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 down to Bankruptcy, this is
just one of likely 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 house in bankruptcy also. I should repeat this but get some advice on this
area of Bankruptcy because it is very tricky and every single 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 Dubbo on 1300 795 575, or visit our
website: www.bankruptcyexpertsDubbo.com.au.
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