Bankruptcy in Brisbane is a tough procedure, but I recognize from meeting with thousands experiencing the possibility of personal bankruptcy for many years that the most terrifying aspect is the distress of losing the family residence.
Practically everyone is on an emotional level attached to their home – it’s where the children have grown, it’s where you sleep, eat, unwind and built it from a house to a home. So it is frightening to believe that something like bankruptcy can sweep in and take all that from you.
So, Could 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 upon your unique scenarios. People usually believe that losing your home is unpreventable and just one more part of Bankruptcy– but don’t drive yourself crazy just yet, as there may be hope.
So how does personal bankruptcy view my house?
The very first thing to understand is that houses are deemed assets– but no two houses will be the same. What you ought to grasp is that whenever 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 liabilities with your asset. This is completed through 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 considerably more ever since the GFC as house prices in many places have been going south so what you spent 4 years ago may not instantly demonstrate the price these days.
However the most significant part with Brisbane and Bankruptcy is that you really need to get a specialist to help you with 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 should take into account your home loan. With loans, you are basically just a client of the bank and they will also have a preference– do they want to take your home back, or do they prefer you to keep the home loan? You might believe that they would certainly want to just take the house to steer clear of the risk, but frankly banks are run as a business, and if they can leave you with a loan to keep generating income off you, they generally will provided that you keep up to date with your monthly payments. However it is still up to the trustee to identify that there is a lot of equity in your property the trustee will push you and the bank to sell off your home.
What is my house 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 house, but the manner in which this is determined in bankruptcy is typically varied. When you declare insolvency you will need to note down the value of your 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 much more accurate 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 rational numbers that can help you to properly value the property and understand its worth even if you are being pressured to sell promptly.
When it comes to Bankruptcy and properties, an additional major point to consider is ownership, in many cases houses are purchased in shared titles. In other words a couple may have bought a house 50/50 using both of these incomes to make the payments. 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 quite possibly various 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 insolvency too. I must repeat this but get some advice on this area of Bankruptcy given that it is very complicated and each and every scenario is varied.
If you truly want 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 Brisbane on 1300 795 575, or visit our website: www.bankruptcyexpertsbrisbane.com.au.