|December 1, 2016||Comments Closed|
Bankruptcy in Bendigo is a challenging task, but I recognize from meeting with thousands experiencing the likelihood of bankruptcy over the years that the most terrifying thought is the concern of losing the family residential property.
Nearly every person is on an emotional degree attached to their home – it’s where the kids have grown up, it’s where you sleep, eat, relax and built it from a house to a home. So it is frightening to feel that a thing like insolvency can sweep in and take all of that away from you.
So, Will you lose your home if you declare bankruptcy?
My response is ‘maybe’– I know it is not an useful reply, but it will really based on your unique circumstances. People usually believe that losing your house is unpreventable and just one more part of Bankruptcy– but don’t make yourself mad just yet, as there might be hope.
So how does insolvency view my house?
The first thing to know is that properties are considered as assets– but no two homes will be the same. What you should understand 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 much of your financial obligations with your asset. This is done through equity– and if there is no equity in your home then there certainly is no real benefit to selling it.
Trustees not selling houses is occurring increasingly more since the GFC as house prices in many areas have been heading south so what you paid 4 years ago may not immediately demonstrate the price today.
But the biggest part with Bendigo and Bankruptcy is that you definitely need to get an expert to help you through this procedure, there are lots of variables in these situations that should be taken into consideration.
For example, if you have no equity in your house you will need to take into account your home loan. With loans, you are basically just a client of the financial institution and they will similarly have a choice– will they wish to take your home back, or do they prefer you to keep the home loan? You may expect that they would certainly wish to just take your home to steer clear of the risk, but frankly financial institutions are run as a business, and if they can leave you with a mortgage to keep earning money off you, they generally will provided that you keep up to date with your monthly payments. However it is nonetheless up to the trustee to determine 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?
Typically with Bankruptcy it is difficult to know what your home is actually worth– indeed, you may have an idea if you were selling off your house, but the manner in which this is worked out in bankruptcy is generally varied. When you file for insolvency you may need 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 much more accurate than applying your ‘gut feel’ or a real estate agent. The other important factor is that you need 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 realistic numbers that can assist you to correctly value the residential property and grasp its worth even if you are being pressed to sell promptly.
When it comes to Bankruptcy and homes, another significant factor to consider is ownership, in many cases houses are purchased in joint names. In other words a couple may have bought a house 50/50 making use of both salaries to make the repayments. If one party declares bankruptcy and the other party does not, the equity is solely factored on the 50 % of the residential property. With Bankruptcy, this is merely one of undoubtedly countless scenarios that are probable when it is in regards to the family home. Keep in mind the non-bankrupt party can buy the bankrupt’s part of the home in bankruptcy also. I should repeat this but get some guidance on this area of Bankruptcy since it is very tricky and each and every situation is varied.
If you truly would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Experts Bendigo on 1300 818 575, or visit our website: www.bankruptcyexpertsbendigo.com.au.