Bankruptcy Gold Coast is a complicated
process, but I know from meeting with thousands facing the prospect of
bankruptcy over the years, that almost nothing concerns people more than the
idea of losing the family home. Almost everyone is on an emotional level 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 basis.
Will you lose your house if you go
bankrupt? The reply is a resounding maybe. (not very helpful, I know) People
typically presume 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 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 Gold 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 clearer idea.
The job of the bankruptcy trustee is to
firstly follow 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 executed
in a bunch of different ways but it mainly comes down to income and assets. The
trustees role is to collect payments over your income threshold. The further
role is to sell any assets that can contribute to repaying your debts.
What this seems 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 repay your debts.
If there is no equity in your house then it's pointless to sell your home. This
is happening increasingly more since the GFC as house prices in many regions
have been heading south so what you paid 4 years ago may not necessarily
reflect the price today.
A quick tip here if you have a house in
Gold Coast and are looking at Bankruptcy: get a professional to help you
through this process, there are a number of variables in these scenarios that
need 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 nicely lent you the money for your house is earning
good money every month in interest out of you, month in month out, as long as
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 decides 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 note the value of your house and the quantity 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 get to this figure. When you
get a valuer out to your home, see to it 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 sensitive sale. Nowadays
that's not the case, but if you meet them and tell them you need to sell your
home in the next 30 days you may control the result. The idea is that you want
a reasonable sell now figure.
There are two main reasons this valuation
system is critical to you: one you will certainly have peace of mind
ascertaining the market value of your house, then afterwards you can easily
build your equity position. The second thing is, your house may be really worth
so much more than you thought. Get some suggestions before carrying this out.
The amount of times I've met clients that have sold their family home of 20
years simply to discover I could of helped them keep it; unfortunately this
happens all too often
When it comes to Bankruptcy and houses,
another major consideration is ownership, in most cases houses are acquired 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 to 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 home in bankruptcy also. I should repeat this but get some
information on this area of Bankruptcy because it is very tricky and each and
every 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
speak with Bankruptcy Advice Gold Coast on 1300 879 867, or visit our website:
www.bankruptcy-advice.com.au/GoldCoast.
