Bankruptcy Darwin is a complicated
process, but I know from meeting with thousands facing the possibility of
bankruptcy over the years, that virtually nothing concerns people more than the
thought of losing the family home or apartment. Almost everybody is sentimentally
connected to their home - it's where the children have grown, it's where you
appreciate life on a day to day basis.
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 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 accepted to pay back the debt you are
in.
So how is it possible to keep my Darwin
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 clearer image.
The responsibility of the bankruptcy
trustee is to firstly comply with the regulation of the bankruptcy act 1966
(it's a very dull 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 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 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 pay
back 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 areas have been heading south so what you paid 4 years ago may not
necessarily reflect the price today.
A quick tip here if you have a house in
Darwin and are looking at Bankruptcy: get an expert 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 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 payments then the bank desires you in there at all
costs. Essentially however it's not the bank's call if the trustee determines
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 of money 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 recommendations or a real estate agents advice to arrive at this
figure. When you get a valuer out to your home, 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 delicate sale. Nowadays
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
technique is critical to you: one you may have peace of mind ascertaining the
market value of your house, and afterwards you can easily build your equity
position. The second thing is, your home may be worth a lot more than you
thought. Get some tips before doing this. The amount of times I've met clients
that have sold their family home of 20 years just to find out I could of helped
them keep it; unfortunately this happens all too often
When it concerns Bankruptcy and houses,
another primary consideration is ownership, often houses are purchased 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 does
not, 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 possible 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 need to repeat this but get some
guidance on this area of Bankruptcy because it is very tricky and every single
case is different.
If you wish to learn more about what to do,
where to turn and what questions to ask about Bankruptcy, then feel free to
talk to Bankruptcy Experts Darwin on 1300 795 575, or visit our website:
www.bankruptcyexpertsDarwin.com.au.
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