Bankruptcy Kalgoorlie is a difficult
process, but I know from meeting with thousands facing the prospect of
bankruptcy over the years, that very little concerns people more than the idea
of losing the family home or apartment. Almost everyone is emotionally connected
to their home - it's where the kids have grown, it's where you enjoy life on a
day to day base.
Will you lose your house if you go
bankrupt? The response is a resounding maybe. (not very helpful, I know) People
generally feel 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 advantage 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 Kalgoorlie
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 idea.
The job of the bankruptcy trustee is to
firstly abide by the regulation of the bankruptcy act 1966 (it's a very boring
read about 600 pages if you are interested).
Within that regulatory framework, the
trustee is to help recuperate monies owed to your creditors, that is
accomplished 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 off any assets that can contribute to fixing your
debts.
What this resembles is that yes the trustee
will sell your house right? Not necessarily. The only reason the trustee will
sell off 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 more and more 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 Kalgoorlie and are looking at Bankruptcy: get a professional to help
you through this process, there are plenty of variables in these scenarios that
need 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 generously lent you the money for your house is
creating good money every month in interest out of you, month in month out, so
long as you keep up to date with your repayments then the bank wants you in
there at all costs. Ultimately however it's not the bank's call if the trustee
decides 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 document 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 provide you peace of mind, don't use your neighbours' gut feel
recommendations or a real estate agents advice to reach this figure. When you
get a valuer out to your home, ensure that 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 give 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 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 sound sell now figure.
There are two reasons this valuation
process is critical to you: one you will likely have peace of mind ascertaining
the market value of your house, and then you can easily develop your equity
position. Secondly, your property may be worth far more than you thought. Get
some suggestions before carrying this out. The amount of times I've seen
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 main consideration is ownership, in most cases 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 concerns Bankruptcy, this is just
one of potentially hundreds of scenarios that are possible 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 should repeat this but get some advice on this
area of Bankruptcy because it is very tricky 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 get in touch with Bankruptcy Experts Kalgoorlie on 1300 795 575, or visit
our website: www.bankruptcyexpertsKalgoorlie.com.au.
