Bankruptcy in Hobart is a difficult procedure, but I know from meeting with thousands dealing with the possibility of going bankrupt over the years that the most terrifying facet is the concern of losing the family home.
Nearly every person is on an emotional level attached to their home – it’s where the kids have grown up, it’s where you sleep, eat, unwind and built it from a house to a home. So it is terrifying to feel that something like bankruptcy can move in and take all of that from you.
So, Could you lose your home if you declare bankruptcy?
My response is ‘possibly’– I know it is not a practical reply, but it will really depend upon your unique conditions. People typically believe that losing your house is unavoidable and just one more part of Bankruptcy– but don’t drive yourself crazy just yet, as there might be hope.
So how does bankruptcy view my house?
The very first thing to comprehend is that houses are deemed assets– but no two homes will be the same. What you need to be aware of is that when it comes to Bankruptcy, they appoint a trustee to oversee the procedure. Their job is to make sure that they can pay off as many of your liabilities with your asset. This is performed via equity– and if there is no equity in your house then there is no real advantage to selling it.
Trustees not selling residential properties is happening considerably more since the GFC as house prices in many locations have been heading south so what you spent 4 years ago may not immediately reflect the price these days.
But the most significant part with Hobart and Bankruptcy is that you really ought to get a specialist to assist you through this process, there are plenty of variables in these situations that should be considered.
For instance, if you have no equity in your home you should take into account your bank loan. With loans, you are basically just a customer of the financial institution and they will also have a choice– do they wish to take your house back, or do they want you to keep the loan? You might think that they would want to just take the house to avoid the risk, but honestly banks are run as a business, and if they can leave you with a mortgage to keep making money off you, they generally will provided that you keep up to date with your repayments. However it is nonetheless up to the trustee to identify that there is a lot of equity in your property the trustee will push you and the bank to sell off your home.
What is my house worth?
Usually with Bankruptcy it is hard to know what your house is actually worth– indeed, you may have an idea if you were selling your home, but the way that this is worked out in personal bankruptcy is usually varied. When you file for bankruptcy you will need to note down the value of your house, and the amount that you owe– and you can work 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 ought 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 effectively value the residential property and realise its value even if you are being pressured to sell promptly.
When it comes to Bankruptcy and houses, another significant point to consider is ownership, in many cases homes are bought in shared names. In other words a couple may have bought a house 50/50 utilizing both incomes 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 home. With Bankruptcy, this is just one of probably countless situations that are likely when it relates to the family home. Keep in mind the non-bankrupt party can buy the bankrupt’s part of the house in bankruptcy too. I must repeat this but get some guidance on this area of Bankruptcy considering that it is very tricky and every single case is different.
If you truly wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then don’t hesitate to talk to Bankruptcy Experts Hobart on 1300 795 575, or visit our website: www.bankruptcyexpertshobart.com.au.