Bankruptcy in Tweedcoast - Will I lose my home if I go bankrupt?




Bankruptcy in Tweedcoast is a tricky process, but I know from meeting with thousands facing the likelihood of bankruptcy over the years, that nothing troubles people more than the idea of losing the family home. Almost every person is on an emotional level connected to their home - it's where the children have grown, it's where you appreciate life on a day to day base.

Will you lose your house if you go bankrupt? The reply is a resounding maybe. (not very useful, I know) People typically feel that 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 strength 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 Tweedcoast 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 image.

The function 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 wondering).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is done in a bunch of assorted 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 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 home then it's pointless to sell your home. This is happening increasingly more since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not really reflect the price today.

A quick word of advice here if you have a house in Tweedcoast and are looking at Bankruptcy: get a specialist to help you through this process, there are a number 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, so long as you keep up to date with your repayments then the bank really wants you in there at all costs. Ultimately however it's not the bank's call if the trustee figures out 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 mark the value of your house and the quantity you owe on the house. A tip if you are attempting 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 tips or a real estate agents advice to come to this figure. When you get a valuer out to your house, ensure you tell the valuer to value the property for a quick sale, make certain 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 the house in the next 30 days you may control the result. The idea is that you want a life-like sell now figure.

There are two reasons this valuation technique is critical to you: one you will definitely have peace of mind ascertaining the market value of your house, then afterwards you can easily develop your equity position. Second of all, your property may be really worth far more than you thought. Get some advice before doing this. The number of times I've met with clients that have sold their family home of 20 years just to discover 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 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 comes down to Bankruptcy, this is just one of potentially numerous scenarios that are likely when it comes 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 help on this area of Bankruptcy because it is very tricky and each and every case is different.

If you would like 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 Advice Tweedcoast on 1300 879 867, or visit our website: www.bankruptcyexpertstweedcoast.com.au

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