Bankruptcy in Wangaratta is a tough procedure, but I recognize from meeting with thousands encountering the possibility of bankruptcy for many years that the most frightening facet is the fear of losing the family home.
Practically everyone is on an emotional level attached to their home – it’s where the little ones have grown, it’s where you sleep, eat, relax and built it from a house to a home. So it is terrifying to believe that a thing like personal bankruptcy can sweep in and take all of that away from you.
So, Will you lose your home if you declare bankruptcy?
My response is ‘possibly’– I understand it is not a practical answer, but it will really based on your specific scenarios. People generally believe that losing your house is inevitable and just another part of Bankruptcy– but don’t drive yourself crazy right now, because there might be hope.
So how does personal bankruptcy view my house?
The very first thing to recognize is that properties are viewed as assets– but no two houses will be the same. What you need to be aware of is that whenever it concerns Bankruptcy, they designate a trustee to oversee the process. Their job is to make sure that they can repay as many of your financial debts with your asset. This is completed via equity– and if there is no equity in your house then there is no real benefit to selling it.
Trustees not selling residential properties is happening considerably more since the GFC as house prices in many areas have been going south so what you spent 4 years ago may not immediately reflect the price today.
But the biggest part with Wangaratta and Bankruptcy is that you truly should get a professional to help you with this procedure, there are lots of variables in these scenarios that should be considered.
For example, if you have no equity in your house you will need to think about your bank loan. With loans, you are essentially just a customer of the bank and they will also have a preference– do they want to get your home back, or do they want you to keep the home loan? You may feel 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 loan to keep generating income 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 house the trustee will push you and the bank to sell off your home.
What is my home worth?
Often with Bankruptcy it is difficult to know what your home is really worth– indeed, you may have an idea if you were selling your house, but the manner in which this is worked out in bankruptcy is generally different. When you file for insolvency you will need to note down the value of the house, and the amount that you owe– and you can work this out by using a valuer. Doing this is going to be far more accurate 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 prices– one for a Quick Sale, and one for a non-time sensitive sale. This will certainly give you 2 rational figures that can guide you to correctly value the property and grasp its value even when you are being pressed to sell promptly.
When it comes to Bankruptcy and houses, another significant consideration is ownership, in most cases homes are bought in joint names. In other words a couple may have bought a house 50/50 making use of 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 residential property. With Bankruptcy, this is just one of probably countless instances that are likely when it relates to the family home. Bear in mind the non-bankrupt party can purchase the bankrupt’s part of the home in bankruptcy also. I should repeat this but get some advice on this area of Bankruptcy given that it is very tricky and every single case is varied.
If you genuinely wish to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to talk to Bankruptcy Experts Wangaratta on 1300 795 575, or visit our website: www.bankruptcyexpertswangaratta.com.au.