Bankruptcy in Dubbo is a difficult task, but I know from meeting with thousands facing the likelihood of bankruptcy over the years that the most terrifying thought is the concern of losing the family residence.
Practically everyone is on an emotional degree connected to their house – it’s where the little ones 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 a thing like insolvency can move in and take all that away from you.
So, Will you lose your home if you declare bankruptcy?
My answer is ‘possibly’– I realise it is not a practical reply, but it is going to really depend on your unique circumstances. People typically believe that losing your home is inevitable and just one more part of Bankruptcy– but don’t drive yourself crazy just yet, because there might be hope.
So how does bankruptcy view my house?
The very first thing to recognize is that properties are considered as assets– but no two houses will be the same. What you need to grasp is that when it concerns Bankruptcy, they appoint a trustee to oversee the process. Their task is to make sure that they can pay off as much of your liabilities with your asset. This is done via equity– and if there is no equity in your house then there is no real benefit to selling it.
Trustees not selling residential properties is happening increasingly more ever since the GFC as house prices in many areas have been going south so what you spent 4 years ago may not immediately demonstrate the price these days.
But the most significant part with Dubbo and Bankruptcy is that you really should get an expert to help you with this process, there are lots of variables in these scenarios that ought to be considered.
As an example, if you have no equity in your house you should consider your bank loan. With loans, you are basically just a client of the bank and they will also have a preference– do they want to get your home back, or do they prefer you to keep the loan? You might believe that they would wish to just take your home to steer clear of the risk, but frankly financial institutions are run as a business, and if these guys can leave you with a loan to keep making money off you, they generally will provided that you keep up to date with your monthly payments. But it is nonetheless up to the trustee to establish that there is a lot of equity in your house the trustee will force you and the bank to sell your home.
What is my home worth?
Usually with Bankruptcy it is difficult to know what your home is really worth– yes, you may have an idea if you were selling your home, but the way that this is calculated in personal bankruptcy is generally different. When you file for insolvency you may have to note down the value of your house, and the amount of money that you owe– and you can figure this out by utilizing a valuer. Doing this is going to be far more accurate than using your ‘gut feel’ or a real estate agent. The other important factor is that you will need to ask your valuer for two values– 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 properly value the property and realise its value even if you are being pushed to sell swiftly.
When it comes to Bankruptcy and properties, another significant point to consider is ownership, in many cases houses are purchased in shared names. In other words a couple may have bought a house 50/50 making use of both of these salaries to make the payments. If one party declares insolvency and the other party does not, the equity is solely factored on the 50 % of the property. With Bankruptcy, this is merely one of probably numerous instances that are probable when it is in regards to the family home. Bear in mind the non-bankrupt party can purchase the bankrupt’s part of the home in bankruptcy also. I should repeat this but get some guidance on this area of Bankruptcy given that it is very complicated and every single case is varied.
If you really want to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Experts Dubbo on 1300 795 575, or visit our website: www.bankruptcyexpertsdubbo.com.au.