Bankruptcy in Tablelands – Worried about losing your home?
Bankruptcy in Tablelands is a challenging procedure, but I realise from meeting with thousands dealing with the likelihood of insolvency over the years that the most terrifying facet is the concern of losing the family home.
Nearly every person is on an emotional degree attached to their home – it’s where the little ones have grown, it’s the place you sleep, eat, relax and built it from a house to a home. So it is distressing to feel that something like bankruptcy can sweep in and take all of that from you.
So, Will you lose your home if you declare bankruptcy?
My answer is ‘maybe’– I know it is not a practical answer, but it will really depend on your unique scenarios. People typically think that losing your house is unpreventable and just another part of Bankruptcy– but don’t drive yourself mad just yet, because there might be hope.
So how does personal bankruptcy view my house?
The first thing to recognize is that properties are considered as assets– but no two houses will be the same. What you should understand is that when it concerns Bankruptcy, they appoint a trustee to oversee the process. Their task is to make certain that they can pay off as much of your debts with your asset. This is performed via equity– and if there is no equity in your house then there is no true benefit to selling it.
Trustees not selling residential properties is occurring increasingly more since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not immediately reflect the price today.
But the most significant part with Tablelands and Bankruptcy is that you definitely need to get a specialist to help you with this procedure, there are a number of factors in these situations that should be taken into account.
For instance, if you have no equity in your home you should take into account your bank loan. With loans, you are basically just a client of the bank and they will similarly have a choice– do they wish to take your home back, or do they prefer you to keep the home loan? You might expect that they would certainly wish to just take your home to steer clear of the risk, but honestly banks are run as a business, and if these guys can leave you with a home loan to keep generating income off you, they generally will provided that you keep up to date with your repayments. But it is still up to the trustee to identify that there is lots of equity in your property the trustee will force you and the bank to sell off your home.
What is my home worth?
Typically with Bankruptcy it is hard to know what your home is really worth– yes, you may have an idea if you were selling off your home, but the way that this is determined in insolvency is usually different. When you file for insolvency you will need to note down the value of the house, and the amount of money that you owe– and you can work this out by utilizing a valuer. This is going to be far more precise than applying your ‘gut feel’ or a real estate agent. The other important factor is that you ought to ask your valuer for two values– one for a Quick Sale, and one for a non-time sensitive sale. This will give you 2 rational amounts that can help you to properly value the residential property and understand its value even if you are being pressed to sell quickly.
When it comes to Bankruptcy and houses, an additional significant factor to consider is ownership, in most cases houses are purchased in shared titles. In other words a couple may have bought a house 50/50 making use of both incomes to make the repayments. If one party declares bankruptcy and the other party does not, the equity is only factored on the 50 % of the residential property. With Bankruptcy, this is merely one of quite possibly various scenarios that are likely when it relates to the family home. Bear in mind the non-bankrupt party can buy the bankrupt’s part of the house in insolvency too. I must repeat this but get some recommendations on this area of Bankruptcy because it is very complicated and each and every scenario is varied.
If you truly want to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Experts Tablelands on 1300 795 575, or visit our website: www.bankruptcyexpertstablelands.com.au.