Bankruptcy in Joondalup is a tough procedure, but I realise from meeting with thousands facing the possibility of insolvency for many years that the most frightening element is the distress of losing the family home.
Nearly everyone is on an emotional degree connected to their home – it’s where the children have grown, it’s where you sleep, eat, relax and built it from a house to a home. So it is scary to think that a thing like bankruptcy can sweep in and take all that away from you.
So, Could you lose your home if you declare bankruptcy?
My response is ‘possibly’– I know it is not a helpful response, but it will really based upon your unique instances. People normally 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 very first thing to recognize is that homes are deemed assets– but no two homes will be the same. What you ought to understand is that when it concerns Bankruptcy, they designate a trustee to oversee the procedure. Their job is to make certain that they can repay as much of your debts with your asset. This is completed via equity– and if there is no equity in your home then there certainly is no real advantage to selling it.
Trustees not selling homes 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 nowadays.
But the biggest part with Joondalup and Bankruptcy is that you truly should get a professional to assist you with this procedure, there are plenty of variables in these scenarios that ought to be considered.
As an example, if you have no equity in your property you need to think about your home loan. With loans, you are practically just a customer of the bank and they will also have a choice– do they want to get your house back, or do they want you to keep the loan? You might believe that they would wish to just take your home to avoid the risk, but honestly banks are run as a business, and if these guys can leave you with a home loan to keep earning 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 identify that there is lots of equity in your home the trustee will push you and the bank to sell off the house.
What is my home worth?
Often with Bankruptcy it is hard to know what your house is actually worth– indeed, you may have an idea if you were selling your house, but the way that this is determined in insolvency is typically varied. When you file for insolvency you may need to note down the value of your home, and the amount of money that you owe– and you can figure this out by using 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 give you 2 rational amounts that can assist you to properly value the residential property and understand its value even if you are being pushed to sell quickly.
When it comes to Bankruptcy and houses, an additional significant point to consider is ownership, in most cases homes are purchased in joint names. In other words a couple may have bought a house 50/50 using both of these incomes 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 undoubtedly various circumstances that are likely when it relates to the family home. Keep in mind the non-bankrupt party can purchase the bankrupt’s part of the house in bankruptcy too. I should repeat this but get some advice on this area of Bankruptcy considering that it is very complicated and every single situation is different.
If you truly would like 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 Joondalup on 1300 795 575, or visit our website: www.bankruptcyexpertsjoondalup.com.au.