Bankruptcy in Wyong is a complicated procedure, but I recognize from meeting with thousands dealing with the chance of insolvency throughout the years that the most frightening aspect is the fear of losing the family residence.
Practically everyone is on an emotional degree attached to their house – it’s where the children have grown, it’s the place you sleep, eat, relax and built it from a house to a home. So it is scary to believe that something like bankruptcy can move in and take all that off you.
So, Will you lose your home if you declare bankruptcy?
My answer is ‘maybe’– I recognize it is not a practical reply, but it is going to really based on your specific instances. People generally think that losing your home is unpreventable and just an additional part of Bankruptcy– but don’t make yourself mad right now, because there may be hope.
So how does insolvency view my house?
The first thing to understand is that houses are deemed assets– but no two houses will be the same. What you ought to understand is that when it comes to Bankruptcy, they designate a trustee to oversee the process. Their job is to make certain that they can settle as many of your financial debts with your asset. This is performed via equity– and if there is no equity in your house then there is no real advantage to selling it.
Trustees not selling homes is occurring progressively more since the GFC as house prices in many locations have been heading south so what you spent 4 years ago may not automatically demonstrate the price these days.
But the most significant part with Wyong and Bankruptcy is that you really ought to get a specialist to help you with this procedure, there are lots of factors in these scenarios that ought to be taken into consideration.
For example, if you have no equity in your home you need to consider your bank loan. With loans, you are basically just a customer of the financial institution and they will also have a choice– do they want to take your house back, or do they want you to keep the home loan? You may feel that they would want to just take your home to steer clear of the risk, but honestly financial institutions are run as a business, and if these guys can leave you with a 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 determine that there is a lot of equity in your home 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 really worth– indeed, you may have an idea if you were selling your house, but the way that this is determined in personal bankruptcy is typically different. When you declare insolvency you may have to note down the value of your home, 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 should ask your valuer for two values– one for a Quick Sale, and one for a non-time sensitive sale. This will give you 2 rational figures that can guide you to correctly value the residential property and realise its value even if you are being pressured to sell promptly.
When it comes to Bankruptcy and homes, another major consideration is ownership, in a lot of cases houses are bought in shared names. In other words a couple may have bought a house 50/50 using both incomes to make the repayments. If one party declares insolvency and the other party does not, the equity is solely factored on the 50 % of the residential property. With Bankruptcy, this is just one of undoubtedly numerous circumstances that are probable when it is in regards to the family home. Remember the non-bankrupt party can purchase the bankrupt’s part of the house in insolvency also. I must repeat this but get some advice on this area of Bankruptcy because it is very tricky and every single situation is varied.
If you genuinely wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then do not hesitate to reach out to Bankruptcy Experts Wyong on 1300 795 575, or visit our website: www.bankruptcyexpertswyong.com.au.