Bankruptcy in Townsville is a difficult process, but I know from meeting with thousands facing the chance of personal bankruptcy over the years that the most frightening thought is the concern of losing the family house.
Nearly every person is on an emotional level linked to their home – it’s where the kids have grown up, it’s the place you sleep, eat, relax and built it from a house to a home. So it is scary to believe that something like bankruptcy can move in and take all that from you.
So, Could you lose your home if you declare bankruptcy?
My answer is ‘maybe’– I realise it is not an useful response, but it will really depend on your specific circumstances. People generally think that losing your house is unavoidable and just an additional part of Bankruptcy– but don’t make yourself crazy just yet, as there could be hope.
So how does insolvency view my house?
The very first thing to understand is that houses are viewed as assets– but no two homes will be the same. What you ought to grasp is that when it concerns Bankruptcy, they designate a trustee to oversee the process. Their task is to make sure that they can pay off as many of your liabilities with your asset. This is done through equity– and if there is no equity in your home then there certainly is no real advantage to selling it.
Trustees not selling houses is occurring considerably more since the GFC as house prices in many places have been heading south so what you paid 4 years ago may not immediately demonstrate the price nowadays.
However the most significant part with Townsville and Bankruptcy is that you really need to get a specialist to help you with this process, there are a number of factors in these scenarios that should be considered.
For instance, if you have no equity in your property you should take into account your bank loan. With loans, you are essentially 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 think that they would certainly wish to just take the house to steer clear of 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 nonetheless 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 your home.
What is my house worth?
Often with Bankruptcy it is difficult to know what your home is actually worth– yes, you may have an idea if you were selling off your house, but the way that this is worked out in bankruptcy is usually different. When you declare insolvency you will have to note down the value of your house, and the amount that you owe– and you can figure this out by utilizing a valuer. Doing this is going to be much more accurate than using your ‘gut feel’ or a real estate agent. The other important factor is that you ought to ask your valuer for two prices– one for a Quick Sale, and one for a non-time sensitive sale. This will give you 2 rational amounts that can guide you to properly value the property and appreciate its value even if you are being pushed to sell promptly.
When it comes to Bankruptcy and homes, an additional significant factor to consider is ownership, in a lot of cases homes are bought in shared names. In other words a couple may have bought a house 50/50 using both incomes to make the payments. If one party declares bankruptcy and the other party does not, the equity is only factored on the 50 % of the home. With Bankruptcy, this is just one of perhaps countless scenarios that are probable when it is in regards to the family home. Remember the non-bankrupt party can purchase the bankrupt’s part of the home in insolvency also. I should repeat this but get some advice on this area of Bankruptcy because it is very tricky and every single case is varied.
If you really 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 Townsville on 1300 795 575, or visit our website: www.bankruptcyexpertstownsville.com.au.