Bankruptcy Coffs Harbour is a difficult
process, but I know from meeting with thousands facing the prospect of
bankruptcy over the years, that nothing worries people more than the notion of
losing the family home. Almost everybody is psychologically connected to their
home - it's where the kids have grown, it's where you take pleasure in life on
a day to day basis.
Will you lose your home if you go bankrupt?
The response is a resounding maybe. (not very helpful, 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 agreed to pay back the debt you are in.
So how is it possible to keep my Coffs
Harbour 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 function of the bankruptcy trustee is
to firstly abide by the regulation of the bankruptcy act 1966 (it's a very dull
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 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 paying back your
debts.
What this seems is that yes the trustee
will sell your house right? Not necessarily. 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 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 Coffs Harbour and are looking at Bankruptcy: get a skilled
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 customers? wouldn't they choose to sell your house and not take the
risk? The bank that has nicely lent you the money for your house is making good
money every month in interest out of you, month in month out, provided you keep
up to date with your fees then the bank wants you in there at all costs.
Ultimately however it's not the bank's call if the trustee determines that
there is plenty 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 amount 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 offer 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 property, make certain you tell the valuer to value
the property for a quick sale, see to it 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. These days
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 sway the result. The idea is that you want a
sensible sell now figure.
There are two main reasons this valuation
technique is critical to you: one you will certainly have peace of mind
ascertaining the market value of your house, and after that you can easily
build your equity position. Secondly, your house may be really worth far more
than you thought. Get some advice before carrying this out. The amount of times
I've met clients that have sold their family home of 20 years simply to figure
out I could of helped them keep it; unfortunately this happens all too often
When it comes to Bankruptcy and houses,
another serious consideration is ownership, often 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 comes to Bankruptcy, this is just
one of probably numerous scenarios that are possible when it relates to the
family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion
of the home in bankruptcy also. I have to repeat this but get some advice on
this area of Bankruptcy because it is very tricky and each and every case is
different.
If you really want to learn more about what
to do, where to turn and what questions to ask about Bankruptcy, then feel free
to speak to Bankruptcy Experts Coffs Harbour on 1300 795 575, or visit our
website: www.bankruptcyexpertsCoffsHarbour.com.au.
