Bankruptcy in Maitland is a challenging process, but I recognize from meeting with thousands experiencing the chance of insolvency over the years that the most terrifying thought is the distress of losing the family home.
Nearly every person is on an emotional degree connected to their home – it’s where the kids have grown up, it’s where you sleep, eat, unwind and built it from a house to a home. So it is terrifying to feel that something like personal bankruptcy can move in and take all that from you.
So, Will you lose your home if you declare bankruptcy?
My response is ‘possibly’– I know it is not a helpful answer, but it is going to really depend on your particular circumstances. People typically think that losing your house is unpreventable and just another part of Bankruptcy– but don’t drive yourself mad just yet, as there might be hope.
So how does insolvency view my house?
The very first thing to comprehend is that properties are considered as assets– but no two houses will be the same. What you need to be aware of is that when it comes to Bankruptcy, they designate a trustee to oversee the process. Their role is to make certain that they can pay off as many of your financial debts with your asset. This is completed through equity– and if there is no equity in your home then there is no true benefit to selling it.
Trustees not selling residential properties is happening considerably more ever since the GFC as house prices in many areas have been heading south so what you paid 4 years ago may not automatically demonstrate the price these days.
But the most significant part with Maitland and Bankruptcy is that you truly ought to get a specialist to help you through this procedure, there are plenty of variables in these situations that ought to be considered.
As an example, if you have no equity in your home you need to think about your home loan. With loans, you are essentially just a customer of the bank and they will similarly have a preference– do they wish to take your house back, or do they want you to keep the loan? You may expect that they would certainly wish to just take the house to steer clear of the risk, but frankly 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 monthly payments. But it is still up to the trustee to establish that there is lots of equity in your home the trustee will force you and the bank to sell off the house.
What is my house worth?
Usually with Bankruptcy it is hard to know what your home is actually worth– indeed, you may have an idea if you were selling your home, but the way that this is determined in bankruptcy is generally different. When you file for insolvency you may have to note down the value of the house, and the amount of money that you owe– and you can figure this out by utilizing a valuer. This is going to be far more precise than using your ‘gut feel’ or a real estate agent. The other important factor is that you will need 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 rational numbers that can guide you to properly value the property and understand its value even if you are being pushed to sell swiftly.
When it comes to Bankruptcy and houses, an additional significant consideration is ownership, in a lot of cases houses are bought in shared titles. In other words a couple may have bought a house 50/50 using both of these salaries to make the payments. If one party declares insolvency 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 various situations that are likely when it relates to the family home. Remember the non-bankrupt party can buy 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 complicated and every single scenario 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 do not hesitate to talk to Bankruptcy Experts Maitland on 1300 795 575, or visit our website: www.bankruptcyexpertsmaitland.com.au.