Bankruptcy in Shellharbour is a challenging process, but I know from meeting with thousands dealing with the likelihood of going bankrupt over the years that the most terrifying element is the distress of losing the family residence.
Practically 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, unwind and built it from a house to a home. So it is terrifying to believe that something like personal bankruptcy can sweep in and take all of that off you.
So, Could you lose your home if you declare bankruptcy?
My response is ‘possibly’– I know it is not a helpful reply, but it will really depend on your unique scenarios. People typically think that losing your home is inevitable and just an additional part of Bankruptcy– but don’t drive yourself crazy right now, as there might be hope.
So how does bankruptcy view my house?
The first thing to comprehend is that homes are considered as assets– but no two houses will be the same. What you should understand is that when it comes to Bankruptcy, they designate a trustee to oversee the process. Their task is to make sure that they can pay off as many of your financial obligations with your asset. This is performed through equity– and if there is no equity in your home then there is no true benefit to selling it.
Trustees not selling homes is occurring progressively more since the GFC as house prices in many places have been heading south so what you paid 4 years ago may not automatically demonstrate the price these days.
But the biggest part with Shellharbour and Bankruptcy is that you truly ought to get a specialist to help you through this process, there are plenty of variables in these scenarios that ought to be taken into consideration.
For instance, if you have no equity in your property you need to consider your bank loan. With loans, you are basically just a customer of the financial institution and they will similarly have a preference– do they want to take your home back, or do they prefer you to keep the home loan? You may believe that they would want to just take your home to steer clear of the risk, but frankly banks are run as a business, and if they can leave you with a mortgage to keep making money off you, they generally will provided that you keep up to date with your repayments. However it is nonetheless up to the trustee to determine that there is lots of equity in your property the trustee will force you and the bank to sell your home.
What is my home worth?
Typically with Bankruptcy it is difficult to know what your house is actually worth– indeed, you may have an idea if you were selling off your home, but the way that this is worked out in bankruptcy is typically different. 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 precise 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 valuations– one for a Quick Sale, and one for a non-time sensitive sale. This will certainly give you 2 realistic numbers that can assist you to properly value the residential property and understand its worth even if you are being pushed to sell promptly.
When it comes to Bankruptcy and properties, another major consideration is ownership, in most cases houses are bought in joint names. In other words a couple may have bought a house 50/50 utilizing both of these incomes to make the repayments. 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 possibly numerous scenarios that are probable when it relates to the family home. Keep in mind the non-bankrupt party can purchase the bankrupt’s part of the home in bankruptcy too. I should repeat this but get some guidance on this area of Bankruptcy considering that it is very tricky and every single scenario is varied.
If you truly want 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 Shellharbour on 1300 795 575, or visit our website: www.bankruptcyexpertsshellharbour.com.au.