Bankruptcy in Port Macquarie is a difficult task, but I realise from meeting with thousands facing the possibility of going bankrupt for many years that the most frightening thought is the fear of losing the family residence.
Nearly everyone is on an emotional degree attached to their home – it’s where the kids have grown, it’s where you sleep, eat, relax and built it from a house to a home. So it is terrifying to feel that something like insolvency can move in and take all of that away from you.
So, Could you lose your home if you go bankrupt?
My answer is ‘possibly’– I know it is not a helpful response, but it will really based on your particular conditions. People generally believe that losing your house is imminent and just one more part of Bankruptcy– but don’t make yourself crazy just yet, because there could be hope.
So how does bankruptcy view my house?
The first thing to understand is that homes are deemed assets– but no two homes will be the same. What you really should grasp is that whenever it comes to Bankruptcy, they designate a trustee to oversee the procedure. Their role is to make certain that they can pay off as many of your debts with your asset. This is done via equity– and if there is no equity in your house then there certainly is no real advantage to selling it.
Trustees not selling residential properties is happening considerably more ever since the GFC as house prices in many places have been heading south so what you spent 4 years ago may not immediately demonstrate the price today.
However the most significant part with Port Macquarie and Bankruptcy is that you definitely need to get a professional to assist you with this procedure, there are lots of factors in these scenarios that should be taken into account.
For example, if you have no equity in your home you will need to think about your bank loan. With loans, you are practically just a customer of the financial institution and they will similarly have a preference– will they want to take your house back, or do they want you to keep the home loan? You might think that they would wish to just take your home to avoid 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 still up to the trustee to identify that there is lots of equity in your property the trustee will force you and the bank to sell off the house.
What is my house 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 your house, but the manner in which this is calculated in personal bankruptcy is usually different. When you declare bankruptcy you will need to note down the value of your home, 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 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 figures that can guide you to correctly value the property and appreciate its value even if you are being pushed to sell swiftly.
When it comes to Bankruptcy and homes, an additional major consideration is ownership, in most cases homes are bought in shared names. In other words a couple may have bought a house 50/50 using both incomes to make the payments. If one party declares insolvency and the other party does not, the equity is only factored on the 50 % of the residential property. With Bankruptcy, this is merely one of quite possibly countless instances that are likely when it relates to the family home. Bear in mind the non-bankrupt party can buy the bankrupt’s part of the home in bankruptcy also. I must repeat this but get some recommendations on this area of Bankruptcy because it is very tricky and every 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 don’t hesitate to talk to Bankruptcy Experts Port Macquarie on 1300 795 575, or visit our website: www.bankruptcyexpertsportmacquarie.com.au.