Bankruptcy Mildura is a challenging
process, but I know from meeting with thousands facing the possibility of
bankruptcy over the years, that practically nothing worries people more than
the notion of losing the family home or apartment. Almost everybody is on an
emotional level 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 house if you go
bankrupt? The solution is a resounding maybe. (not very helpful, I know) People
generally believe 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 Mildura
house, you ask? It's easier if I explain the basic guideline behind the Bankruptcy
process as administered by the trustee, then you'll have a more clear picture.
The responsibility of the bankruptcy
trustee is to firstly abide by the regulation of the bankruptcy act 1966 (it's
a very plain read about 600 pages if you are serious).
Within that regulatory framework, the
trustee is to help recover monies owed to your creditors, that is accomplished
in a bunch of different 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 paying back your debts.
What this sounds like 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 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 always
reflect the price today.
A quick tip here if you have a house in
Mildura and are looking at Bankruptcy: get a specialist 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 want to sell your house and not take the risk?
The bank that has kindly lent you the money for your house is earning good
money every month in interest out of you, month in month out, provided that you
keep up to date with your 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 put down the value of your house and the level 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 give you peace of mind, don't use your neighbours' gut feel tips
or a real estate agents advice to reach this figure. When you get a valuer out
to your house, ensure you tell the valuer to value the property for a quick
sale, ensure 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 let them know 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
process is critical to you: one you may have peace of mind ascertaining the
market value of your house, then afterwards you can easily establish your
equity position. Second of all, your property may be really worth a lot 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
figure out I could of helped them keep it; unfortunately this happens all too
often
When it comes to Bankruptcy and houses,
another notable consideration is ownership, often houses are purchased 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 concerns 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 part of
the home in bankruptcy also. I have to repeat this but get some information on
this area of Bankruptcy because it is very tricky and every single 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 reach out to Bankruptcy Experts Mildura on 1300 795 575, or visit our
website: www.bankruptcyexpertsMildura.com.au.
