Bankruptcy Albury is a difficult process, but I know from meeting with thousands facing
the possibility of bankruptcy over the years, that not much worries people more
than the thought of losing the family home or apartment. Almost everyone is on
an emotional level connected to their home - it's where the kids have grown up,
it's where you appreciate life on a day to day basis.
Will
you lose your house if you go bankrupt? The solution is a resounding maybe.
(not very helpful, I know) People typically assume it's an inevitable
consequence and a part of Bankruptcy, and as a result 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 agreed to
pay back the debt you are in.
So
how is it possible to keep my Albury 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 idea.
The
duty 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 recover monies owed to your
creditors, that is carried out in a bunch of various 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 off any assets that can
contribute to fixing your debts.
What
this seems 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 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 always reflect the price today.
A
quick word of advice here if you have a house in Albury and are looking at Bankruptcy:
get an expert 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 customers? wouldn't they need 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, just as long as you keep up to date with your
repayments then the bank desires you in there at all costs. Ultimately however
it's not the bank's call if the trustee decides that there is a lot 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 put down 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 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 property, make
sure 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 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 tell them you need to sell the house in the next 30 days you may sway the
result. The idea is that you want a life-like 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
afterwards you can easily build your equity position. Second of all, your
property may be worth much more than you thought. Get some guidance before
carrying this out. The number of times I've seen clients that have sold their
family home of 20 years simply to find 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. 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 relates to Bankruptcy, this is just one of probably numerous scenarios that
are likely 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 information on this area of Bankruptcy because it is
very tricky and every 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 call Bankruptcy Albury on 1300 795 575,
or visit our website: bankruptcyexpertsalbury.com.au