Bankruptcy in Hervey Bay is a tough process, but I realise from meeting with thousands dealing with the likelihood of personal bankruptcy throughout the years that the most terrifying aspect is the fear of losing the family residence.
Practically everyone is on an emotional level attached to their home – it’s where the kids have grown up, it’s the place you sleep, eat, unwind and built it from a house to a home. So it is distressing to feel that a thing like bankruptcy can sweep in and take all of that off you.
So, Will you lose your home if you declare bankruptcy?
My response is ‘possibly’– I recognize it is not a practical answer, but it is going to really depend on your unique instances. People generally think that losing your house is imminent and just an additional part of Bankruptcy– but don’t make yourself mad just yet, because there might be hope.
So how does insolvency view my house?
The very first thing to know is that homes are considered as assets– but no two homes will be the same. What you really should understand is that whenever it concerns Bankruptcy, they designate a trustee to oversee the procedure. Their job is to make sure that they can pay off as many of your financial obligations with your asset. This is done through equity– and if there is no equity in your home then there certainly is no true advantage to selling it.
Trustees not selling residential properties is happening increasingly more ever since the GFC as house prices in many places have been going south so what you spent 4 years ago may not instantly reflect the price nowadays.
However the most significant part with Hervey Bay and Bankruptcy is that you truly should get an expert to assist you through this process, there are lots of factors in these situations that ought to be taken into account.
For instance, if you have no equity in your property you will need to consider your home loan. With loans, you are practically just a client of the bank and they will similarly have a choice– do they want to get your home back, or do they want you to keep the home loan? You may expect that they would certainly wish to just take your home to avoid the risk, but frankly banks are run as a business, and if they 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 establish that there is lots of equity in your house the trustee will push you and the bank to sell off the house.
What is my home worth?
Typically 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 home, but the manner in which this is calculated in personal bankruptcy is usually different. When you declare insolvency you may have to note down the value of the house, and the amount that you owe– and you can figure this out by using 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 should ask your valuer for two valuations– one for a Quick Sale, and one for a non-time sensitive sale. This will certainly give you 2 realistic figures that can help you to correctly value the residential property and grasp its worth even when you are being pressed to sell promptly.
When it comes to Bankruptcy and homes, another significant consideration is ownership, in most cases homes are purchased in joint titles. In other words a couple may have bought a house 50/50 making use of both salaries to make the payments. If one party declares insolvency and the other party does not, the equity is solely factored on the 50 % of the home. With Bankruptcy, this is just one of possibly countless instances that are likely when it is in regards to the family home. Bear in mind the non-bankrupt party can buy the bankrupt’s part of the house in insolvency too. I should repeat this but get some guidance on this area of Bankruptcy considering that it is very tricky and every scenario is different.
If you truly wish to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then don’t hesitate to reach out to Bankruptcy Experts Hervey Bay on 1300 795 575, or visit our website: www.bankruptcyexpertsherveybay.com.au.