Bankruptcy in Lismore is a challenging process, but I know from meeting with thousands facing the possibility of bankruptcy throughout the years that the most frightening facet is the fear of losing the family house.
Almost everyone is on an emotional degree connected 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 believe that something like bankruptcy can sweep in and take all that off you.
So, Will you lose your home if you declare bankruptcy?
My answer is ‘maybe’– I know it is not an useful response, but it will really depend on your unique circumstances. People usually believe that losing your home is inevitable and just an additional part of Bankruptcy– but don’t drive yourself crazy just yet, because there might be hope.
So how does insolvency view my house?
The very first thing to know is that homes are deemed assets– but no two houses will be the same. What you need to be aware of is that whenever it concerns Bankruptcy, they designate a trustee to oversee the procedure. Their task is to make sure that they can repay as many of your liabilities with your asset. This is done 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 increasingly more ever since the GFC as house prices in many places have been heading south so what you paid 4 years ago may not instantly demonstrate the price nowadays.
However the biggest part with Lismore and Bankruptcy is that you really ought to get a professional to assist you with this process, there are lots of variables in these scenarios that ought to be considered.
For example, if you have no equity in your property you should take into account your home loan. With loans, you are practically just a customer of the financial institution and they will also have a preference– do they want to take your house back, or do they want you to keep the loan? You might expect that they would certainly want to just take the house to avoid the risk, but honestly financial institutions are run as a business, and if they can leave you with a loan to keep earning money off you, they generally will provided that you keep up to date with your repayments. But it is still up to the trustee to identify that there is a lot of equity in your house the trustee will force you and the bank to sell off your home.
What is my home worth?
Usually with Bankruptcy it is difficult to know what your home is really worth– indeed, you may have an idea if you were selling your house, but the way that this is calculated in bankruptcy is usually different. When you declare bankruptcy you will need to note down the value of your house, and the amount that you owe– and you can figure this out by utilizing 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 should ask your valuer for two valuations– one for a Quick Sale, and one for a non-time sensitive sale. This will give you 2 realistic figures that can guide you to properly value the property and realise its value even if you are being pressured to sell swiftly.
When it comes to Bankruptcy and houses, another significant consideration is ownership, in many cases homes are bought in joint titles. In other words a couple may have bought a house 50/50 utilizing both salaries to make the repayments. If one party declares insolvency and the other party does not, the equity is solely factored on the 50 % of the home. With Bankruptcy, this is merely one of perhaps various circumstances that are probable when it is in regards to the family home. Remember the non-bankrupt party can buy the bankrupt’s part of the home in bankruptcy too. I should repeat this but get some advice on this area of Bankruptcy because it is very complicated and every single case is different.
If you genuinely wish to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then do not hesitate to talk to Bankruptcy Experts Lismore on 1300 795 575, or visit our website: www.bankruptcyexpertslismore.com.au.