|December 1, 2016||Comments Closed|
Bankruptcy in Ipswich is a difficult process, but I recognize from meeting with thousands encountering the likelihood of insolvency over the years that the most terrifying facet is the distress of losing the family residential property.
Nearly 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 terrifying to believe that something like bankruptcy can move in and take all of that from you.
So, Could you lose your home if you declare bankruptcy?
My response is ‘possibly’– I realise it is not a practical answer, but it will really depend on your unique conditions. People normally think that losing your house is unavoidable and just another part of Bankruptcy– but don’t make yourself mad right now, because there could be hope.
So how does bankruptcy view my house?
The first thing to know is that houses are deemed assets– but no two houses will be the same. What you ought to understand is that when it comes to Bankruptcy, they designate a trustee to oversee the procedure. Their job is to make certain 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 certainly is no real benefit to selling it.
Trustees not selling homes is happening considerably more since the GFC as house prices in many areas have been going south so what you paid 4 years ago may not instantly reflect the price these days.
However the biggest part with Ipswich and Bankruptcy is that you definitely ought to get a professional to help you through this procedure, there are a number of variables in these situations that should be considered.
For instance, if you have no equity in the house you should consider your home loan. With loans, you are essentially just a client of the financial institution and they will similarly have a preference– will they wish to get your house back, or do they want you to keep the loan? You may expect that they would wish 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 mortgage 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 determine 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?
Typically with Bankruptcy it is difficult to know what your house is actually worth– yes, you may have an idea if you were selling off your house, but the manner in which this is worked out in insolvency is generally varied. When you declare bankruptcy you may need to note down the value of your house, and the amount of money that you owe– and you can figure this out by utilizing a valuer. This is going to be much 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 valuations– one for a Quick Sale, and one for a non-time sensitive sale. This will certainly give you 2 realistic amounts that can help you to properly value the property and appreciate its worth even if you are being pressed to sell swiftly.
When it comes to Bankruptcy and homes, another major consideration is ownership, in most cases houses are purchased in shared 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 undoubtedly countless circumstances that are probable when it relates to the family home. Keep in mind the non-bankrupt party can purchase the bankrupt’s part of the house in insolvency too. I should repeat this but get some advice on this area of Bankruptcy because it is very tricky and each and every situation is varied.
If you genuinely would like 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 Ipswich on 1300 795 575, or visit our website: www.bankruptcyexpertsipswich.com.au.