Bankruptcy in Toowoomba is a tough task, but I know from meeting with thousands facing the likelihood of going bankrupt throughout the years that the most terrifying thought is the fear of losing the family residential property.
Nearly everyone is on an emotional degree linked to their home – it’s where the children have grown up, it’s the place you sleep, eat, relax and built it from a house to a home. So it is terrifying to believe that something like insolvency can sweep in and take all that away from you.
So, Could you lose your home if you go bankrupt?
My response is ‘possibly’– I realise it is not an useful reply, but it will really depend upon your particular instances. People usually think that losing your home is unpreventable and just another part of Bankruptcy– but don’t make yourself mad right now, as there might be hope.
So how does personal bankruptcy view my house?
The very first thing to understand is that houses are viewed as assets– but no two homes will be the same. What you need to be aware of is that when it concerns Bankruptcy, they appoint a trustee to oversee the process. Their job is to make certain that they can pay off as much of your financial debts with your asset. This is done through equity– and if there is no equity in your home then there is no true advantage to selling it.
Trustees not selling houses is occurring significantly more ever since the GFC as house prices in many areas have been heading south so what you spent 4 years ago may not immediately reflect the price these days.
However the biggest part with Toowoomba and Bankruptcy is that you truly need to get a professional to help you with this procedure, there are lots of factors in these scenarios that ought to be considered.
As an example, if you have no equity in the house you should take into account your bank loan. With loans, you are practically just a client of the financial institution and they will similarly have a choice– do they wish to take your house back, or do they prefer you to keep the loan? You might expect that they would wish to just take your home to avoid the risk, but honestly financial institutions are run as a business, and if these guys can leave you with a home loan to keep earning money off you, they generally will provided that you keep up to date with your monthly payments. However it is nonetheless up to the trustee to establish that there is lots of equity in your house the trustee will force you and the bank to sell the house.
What is my house 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 manner in which this is worked out in insolvency is typically varied. When you declare bankruptcy you will have to note down the value of your house, and the amount that you owe– and you can work this out by using a valuer. This is going to be far more precise than using 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 assist you to effectively value the residential property and grasp its value even when you are being pushed to sell quickly.
When it comes to Bankruptcy and properties, an additional significant consideration is ownership, in a lot of cases homes are purchased in joint titles. In other words a couple may have bought a house 50/50 utilizing both salaries 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 home. With Bankruptcy, this is just one of undoubtedly countless circumstances that are likely when it relates to the family home. Remember the non-bankrupt party can purchase the bankrupt’s part of the house in insolvency also. I should repeat this but get some guidance on this area of Bankruptcy since it is very complicated and every scenario is different.
If you truly would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to talk to Bankruptcy Experts Toowoomba on 1300 795 575, or visit our website: www.bankruptcyexpertstoowoomba.com.au.