Bankruptcy in Frankston is a tough process, but I realise from meeting with thousands encountering the possibility of insolvency throughout the years that the most terrifying aspect is the distress 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 the place you sleep, eat, relax and built it from a house to a home. So it is frightening to think that something like personal bankruptcy can move in and take all of that off you.
So, Will you lose your home if you go bankrupt?
My answer is ‘possibly’– I know it is not an useful reply, but it is going to really depend on your specific conditions. People typically think that losing your home is imminent and just another part of Bankruptcy– but don’t drive yourself mad just yet, as there may be hope.
So how does personal bankruptcy view my house?
The first thing to comprehend is that houses are viewed as assets– but no two homes will be the same. What you really should grasp is that whenever it concerns Bankruptcy, they appoint a trustee to oversee the process. Their role is to make sure that they can pay off as much of your liabilities with your asset. This is done via equity– and if there is no equity in your home then there certainly is no true advantage to selling it.
Trustees not selling houses is occurring considerably more since the GFC as house prices in many locations have been heading south so what you spent 4 years ago may not automatically reflect the price today.
However the biggest part with Frankston and Bankruptcy is that you really should get a specialist to help you with this process, there are lots of factors in these scenarios that should be considered.
For example, if you have no equity in your home you need to think about your home loan. With loans, you are practically just a customer of the bank and they will similarly have a preference– will they want to get your house back, or do they want you to keep the loan? You may think that they would want to just take the house to steer clear of the risk, but honestly financial institutions are run as a business, and if they can leave you with a home loan to keep generating income off you, they generally will provided that you keep up to date with your monthly payments. However it is still up to the trustee to determine 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?
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 determined in personal bankruptcy is usually varied. When you declare bankruptcy you will have to note down the value of your house, and the amount of money that you owe– and you can work this out by utilizing a valuer. Doing this is going to be much 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 valuations– one for a Quick Sale, and one for a non-time sensitive sale. This will certainly give you 2 rational figures that can assist you to effectively value the property and appreciate its worth even when you are being pressured to sell quickly.
When it comes to Bankruptcy and homes, an additional significant factor to consider is ownership, in a lot of cases houses are bought in shared names. In other words a couple may have bought a house 50/50 making use of both of these salaries to make the payments. If one party declares bankruptcy 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 perhaps various situations 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 too. I should repeat this but get some recommendations on this area of Bankruptcy because it is very tricky and every scenario is varied.
If you truly 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 Frankston on 1300 795 575, or visit our website: www.bankruptcyexpertsfrankston.com.au.