|December 1, 2016||Comments Closed|
Bankruptcy in Mount Isa is a tough task, but I know from meeting with thousands experiencing the likelihood of personal bankruptcy over the years that the most terrifying element is the distress of losing the family house.
Almost everyone is on an emotional degree connected to their house – it’s where the little ones have grown up, it’s where you sleep, eat, relax and built it from a house to a home. So it is scary to think that something like personal bankruptcy can sweep in and take all that off you.
So, Will you lose your home if you declare bankruptcy?
My answer is ‘possibly’– I understand it is not a helpful reply, but it will really depend upon your specific circumstances. People typically believe that losing your home is imminent and just an additional part of Bankruptcy– but don’t make yourself mad right now, as there may be hope.
So how does bankruptcy view my house?
The first thing to recognize is that properties are deemed assets– but no two homes will be the same. What you really should be aware of is that when it concerns Bankruptcy, they designate a trustee to oversee the process. Their task is to make certain that they can settle as many of your financial obligations with your asset. This is performed via equity– and if there is no equity in your house then there certainly is no real advantage to selling it.
Trustees not selling homes is occurring increasingly more ever since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not immediately reflect the price these days.
However the biggest part with Mount Isa and Bankruptcy is that you definitely ought to get a specialist to assist you through this procedure, there are lots of variables in these situations that should be taken into account.
As an example, if you have no equity in your home you need to consider your home loan. With loans, you are practically just a customer of the bank and they will also have a choice– will they wish to get your home back, or do they want you to keep the home loan? You might expect that they would certainly want to just take your home to steer clear of the risk, but frankly banks are run as a business, and if these guys can leave you with a loan to keep generating income off you, they generally will provided that you keep up to date with your repayments. However it is still up to the trustee to establish that there is a lot of equity in your home the trustee will force you and the bank to sell the house.
What is my home worth?
Typically with Bankruptcy it is difficult to know what your home is really worth– yes, you may have an idea if you were selling off your house, but the manner in which this is determined in bankruptcy is usually different. When you file for insolvency you will need to note down the value of the house, and the amount of money that you owe– and you can work this out by using a valuer. Doing this is going to be far more precise 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 certainly give you 2 realistic numbers that can help you to effectively value the residential property and appreciate its value even when you are being pressured to sell quickly.
When it comes to Bankruptcy and houses, an additional major factor to consider is ownership, in most cases homes are purchased in joint titles. In other words a couple may have bought a house 50/50 making use of both of these 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 residential property. With Bankruptcy, this is merely one of undoubtedly countless scenarios that are probable when it relates to the family home. Keep in mind the non-bankrupt party can buy 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 every scenario is varied.
If you genuinely wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then don’t hesitate to talk to Bankruptcy Experts Mount Isa on 1300 795 575, or visit our website: www.bankruptcyexpertsmountisa.com.au.