Bankruptcy in Whitsundays is a tough procedure, but I realise from meeting with thousands experiencing the possibility of insolvency throughout the years that the most frightening aspect is the distress of losing the family residence.
Almost every person is on an emotional level attached to their home – it’s where the children have grown up, it’s the place you sleep, eat, unwind and built it from a house to a home. So it is frightening to believe that a thing like insolvency can sweep in and take all that away from you.
So, Will you lose your home if you go bankrupt?
My response is ‘maybe’ – I realise it is not a helpful response, but it is going to really based on your unique scenarios. People typically believe that losing your home is imminent and just an additional part of Bankruptcy – but don’t drive yourself crazy right now, as there may be hope.
So how does bankruptcy view my house?
The first thing to understand is that homes are considered as assets – but no two homes will be the same. What you should understand is that whenever it comes to Bankruptcy, they appoint a trustee to oversee the process. Their role is to make certain that they can repay as many of your financial obligations with your asset. This is completed through equity – and if there is no equity in your home then there is no real benefit to selling it.
Trustees not selling homes is happening considerably more ever since the GFC as house prices in many areas have been going south so what you paid 4 years ago may not automatically demonstrate the price these days.
But the most significant part with Whitsundays and Bankruptcy is that you truly need to get an expert to assist you with this procedure, there are a number of factors in these situations that ought to be taken into account.
For instance, if you have no equity in your home you should think about your bank loan. With loans, you are practically just a client of the bank and they will also have a preference– do they wish to get your house back, or do they prefer you to keep the home loan? You may feel that they would wish to just take the house to avoid the risk, but frankly financial institutions are run as a business, and if these guys can leave you with a loan to keep earning money off you, they generally will provided that you keep up to date with your monthly payments. But it is still up to the trustee to establish that there is lots of equity in your property the trustee will force you and the bank to sell off the house.
What is my house worth?
Often with Bankruptcy it is difficult to know what your home is really worth– indeed, you may have an idea if you were selling off your house, but the way that this is worked out in bankruptcy is generally different. When you file for insolvency you may have to note down the value of your house, and the amount that you owe – and you can work this out by utilizing a valuer. Doing this is going to be far more precise than using your ‘gut feel’ or a real estate agent. The other important factor is that you need to ask your valuer for two values– one for a Quick Sale, and one for a non-time sensitive sale. This will certainly give you 2 realistic numbers that can help you to correctly value the residential property and grasp its worth even if you are being pressed to sell swiftly.
When it comes to Bankruptcy and properties, an additional significant consideration is ownership, in a lot of cases houses are purchased in joint titles. In other words a couple may have bought a house 50/50 using both salaries to make the repayments. If one party declares insolvency and the other party does not, the equity is only factored on the 50 % of the property. With Bankruptcy, this is merely one of perhaps various instances that are likely when it is in regards to the family home. Keep in mind the non-bankrupt party can buy the bankrupt’s part of the house in bankruptcy too. I should repeat this but get some guidance on this area of Bankruptcy since it is very complicated and every single case is different.
If you genuinely would like 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 Whitsundays on 1300 795 575, or visit our website: www.bankruptcyexpertswhitsundays.com.au.