Bankruptcy in Perth is a difficult process, but I realise from meeting with thousands dealing with the likelihood of bankruptcy throughout the years that the most frightening aspect is the concern of losing the family residence.
Practically every person is on an emotional degree attached to their home – it’s where the little ones have grown up, it’s the place you sleep, eat, unwind and built it from a house to a home. So it is scary to believe that something like bankruptcy can sweep in and take all that away from you.
So, Will you lose your home if you go bankrupt?
My answer is ‘maybe’– I understand it is not a practical answer, but it is going to really based upon your particular scenarios. People normally believe that losing your house is unavoidable and just another part of Bankruptcy– but don’t make yourself mad right now, because there could be hope.
So how does personal bankruptcy view my house?
The very first thing to recognize is that homes are viewed as assets– but no two homes will be the same. What you need to comprehend is that whenever it concerns Bankruptcy, they appoint a trustee to oversee the procedure. Their role is to make certain that they can pay off as much of your debts with your asset. This is completed via 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 increasingly more since the GFC as house prices in many areas have been going south so what you paid 4 years ago may not instantly demonstrate the price nowadays.
However the biggest part with Perth and Bankruptcy is that you really need to get a specialist to help you with this procedure, there are a number of factors in these scenarios that ought to be taken into account.
For instance, if you have no equity in your house you should take into account your bank loan. With loans, you are practically just a customer of the bank and they will similarly have a choice – do they wish to take your house back, or do they want you to keep the loan? You may think that they would certainly wish to just take the house to steer clear of 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 repayments. However it is still up to the trustee to determine that there is a lot of equity in your property the trustee will push you and the bank to sell off the house.
What is my home worth?
Often with Bankruptcy it is hard to know what your house is actually worth– yes, you may have an idea if you were selling off your home, but the manner in which this is worked out in personal bankruptcy is usually different. When you file for bankruptcy you will need to note down the value of the 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 applying 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 rational amounts that can guide you to properly value the residential property and understand its value even if you are being pressed to sell promptly.
When it comes to Bankruptcy and houses, an additional significant point to consider 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 home. With Bankruptcy, this is just one of probably countless scenarios that are probable when it relates to the family home. Remember the non-bankrupt party can purchase the bankrupt’s part of the home in insolvency too. I must repeat this but get some advice on this area of Bankruptcy since it is very complicated and every case is varied.
If you genuinely would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then do not hesitate to talk to Bankruptcy Experts Perth on 1300 795 575, or visit our website: www.bankruptcyexpertsperth.com.au.