Bankruptcy Maitland is a difficult to
understand process, but I know from meeting with thousands facing the chance of
bankruptcy over the years, that virtually nothing troubles people more than the
idea of losing the family home or apartment. Almost everyone is sentimentally
connected to their home - it's where the kids have grown up, it's where you
take pleasure in life on a day to day basis.
Will you lose your house if you go
bankrupt? The answer
is a resounding maybe. (not very useful, I know) People
typically presume 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 strength 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 Maitland
house, you ask? It's easier if I explain the basic theory behind the Bankruptcy
process as administered by the trustee, then you'll have a clearer image.
The job of the bankruptcy trustee is to
firstly agree to the regulation of the bankruptcy act 1966 (it's a very dry
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 carried out
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 any assets that can contribute to paying 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 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 word of advice here if you have a
house in Maitland and are looking at Bankruptcy: get a specialist to help you
through this process, there are a lot of variables in these scenarios that
should be considered.
You might wonder, why would the bank want
bankrupt customers? wouldn't they hope to sell your house and not take the
risk? The bank that has kindly lent you the money for your house is making good
money every month in interest out of you, month in month out, provided that you
keep up to date with your repayments then the bank really wants you in there at
all costs. Essentially 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 mark the value of your house and the portion 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 give you peace of mind, don't use your neighbours' gut feel advice or
a real estate agents advice to arrive at this figure. When you get a valuer out
to your house, ensure 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 provide 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 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 real sell now figure.
There are two reasons this valuation system
is critical to you: one you will certainly have peace of mind ascertaining the
market value of your house, then afterwards you can easily set up your equity
position. Second of all, your property may be worth so much more than you
thought. Get some tips before doing this. The amount of times I've seen clients
that have sold their family home of 20 years only to find out I could of helped
them keep it; unfortunately this happens all too often
When it concerns Bankruptcy and houses,
another big consideration is ownership, often houses are acquired 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 potentially 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 need to repeat this but get some advice on this
area of Bankruptcy because it is very tricky and every case is different.
If you need to learn more about what to do,
where to turn and what questions to ask about Bankruptcy, then feel free to
speak with Bankruptcy Experts Maitland on 1300 795 575, or visit our website:
www.bankruptcyexpertsMaitland.com.au.
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