Bankruptcy in Port Stephens is a tough process, but I realise from meeting with thousands experiencing the likelihood of going bankrupt for many years that the most frightening facet is the concern of losing the family residential property.
Almost everyone is on an emotional degree linked to their home – it’s where the kids have grown, it’s where you sleep, eat, relax and built it from a house to a home. So it is distressing to think that something like insolvency can move in and take all that off you.
So, Will you lose your home if you go bankrupt?
My response is ‘maybe’– I recognize it is not a helpful reply, but it will really depend upon your unique instances. People typically believe that losing your home is unavoidable and just an additional 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 deemed assets– but no two homes will be the same. What you ought to be aware of is that when it comes to Bankruptcy, they designate a trustee to oversee the process. Their role is to make sure that they can repay as many of your liabilities with your asset. This is performed via equity– and if there is no equity in your house then there is no real advantage to selling it.
Trustees not selling residential properties is occurring increasingly more ever since the GFC as house prices in many areas have been heading south so what you paid 4 years ago may not immediately reflect the price these days.
However the most significant part with Port Stephens and Bankruptcy is that you really ought to get a specialist to assist you through this procedure, there are a number of variables in these situations that ought to be taken into consideration.
For instance, if you have no equity in your property you will need to think about your home loan. With loans, you are essentially just a customer of the financial institution and they will similarly have a choice– will they wish to get your house back, or do they want you to keep the loan? You may feel that they would want to just take your home to steer clear of the risk, but honestly financial institutions are run as a business, and if these guys can leave you with a loan to keep making money off you, they generally will provided that you keep up to date with your repayments. However it is still up to the trustee to establish that there is lots of equity in your property the trustee will push you and the bank to sell the house.
What is my home worth?
Usually with Bankruptcy it is hard to know what your house is really worth– yes, you may have an idea if you were selling your home, but the manner in which this is determined in personal bankruptcy is usually different. When you file for bankruptcy you may have to note down the value of your home, 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 applying your ‘gut feel’ or a real estate agent. The other important factor is that you will 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 properly value the property and realise its worth even if you are being pushed to sell promptly.
When it comes to Bankruptcy and properties, another major point to consider is ownership, in many cases houses are purchased in joint names. In other words a couple may have bought a house 50/50 making use of both of these 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 residential property. With Bankruptcy, this is merely one of quite possibly various circumstances that are likely when it is in regards to the family home. Bear in mind the non-bankrupt party can purchase the bankrupt’s part of the home in bankruptcy too. I must repeat this but get some guidance on this area of Bankruptcy considering that it is very tricky and every single case 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 don’t hesitate to talk to Bankruptcy Experts Port Stephens on 1300 795 575, or visit our website: www.bankruptcyexpertsportstephens.com.au.