Bankruptcy in Penrith is a tough process, but I recognize from meeting with thousands facing the likelihood of personal bankruptcy over the years that the most frightening thought is the distress of losing the family house.
Practically every person is on an emotional level attached to their home – 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 terrifying to think that a thing like insolvency can move in and take all of that off you.
So, Will you lose your home if you go bankrupt?
My answer is ‘maybe’– I know it is not a practical answer, but it will really based upon your unique scenarios. People normally believe that losing your home is imminent and just an additional part of Bankruptcy– but don’t make yourself mad right now, because there may be hope.
So how does personal bankruptcy view my house?
The very first thing to comprehend is that houses are considered as assets– but no two houses will be the same. What you ought to be aware of is that when it comes to Bankruptcy, they designate a trustee to oversee the procedure. Their task is to make sure that they can repay as many of your financial obligations with your asset. This is completed through equity– and if there is no equity in your home then there is no real benefit to selling it.
Trustees not selling homes is happening significantly more since the GFC as house prices in many places have been heading south so what you paid 4 years ago may not instantly reflect the price nowadays.
But the biggest part with Penrith and Bankruptcy is that you definitely need to get a professional to help you through this process, there are plenty of variables in these situations that ought to be taken into account.
For instance, if you have no equity in the house you will need to take into account your bank loan. With loans, you are essentially just a client of the financial institution and they will similarly have a preference– do they want to take your home back, or do they want you to keep the loan? You may believe that they would wish to just take the house to steer clear of the risk, but frankly banks are run as a business, and if these guys can leave you with a home loan to keep generating income off you, they generally will provided that you keep up to date with your repayments. But it is still up to the trustee to establish that there is lots of equity in your home the trustee will push you and the bank to sell your home.
What is my home worth?
Often with Bankruptcy it is hard to know what your house is really worth– indeed, you may have an idea if you were selling off your house, but the manner in which this is worked out in insolvency is usually different. When you declare bankruptcy you will need to note down the value of your house, and the amount of money that you owe– and you can figure this out by using a valuer. This is going to be far more accurate than applying your ‘gut feel’ or a real estate agent. The other important factor is that you need to ask your valuer for two valuations– one for a Quick Sale, and one for a non-time sensitive sale. This will give you 2 rational amounts that can guide you to correctly value the property and realise its value even when you are being pressured to sell swiftly.
When it comes to Bankruptcy and houses, an additional significant point to consider is ownership, in a lot of cases homes are bought 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 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 probably countless scenarios that are likely when it is in regards to the family home. Bear in mind the non-bankrupt party can buy the bankrupt’s part of the house in bankruptcy also. I should repeat this but get some recommendations on this area of Bankruptcy considering that it is very complicated and every situation is different.
If you genuinely want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then don’t hesitate to reach out to Bankruptcy Experts Penrith on 1300 795 575, or visit our website: www.bankruptcyexpertspenrith.com.au.