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Bankruptcy in Canberra – Concerned about losing your home?

Bankruptcy in Canberra is a complicated task, but I recognize from meeting with thousands facing the chance of bankruptcy over the years that the most terrifying element is the concern of losing the family home.

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Nearly every person is on an emotional degree attached to their house – it’s where the kids have grown, it’s where you sleep, eat, unwind and built it from a house to a home. So it is terrifying to believe that something like personal bankruptcy can move in and take all of that away from you.

So, Could you lose your home if you declare bankruptcy?

My response is ‘possibly’– I realise it is not a practical answer, but it is going to really based on your specific circumstances. People generally think that losing your house is inevitable and just another part of Bankruptcy– but don’t make yourself crazy just yet, because there could be hope.

So how does personal bankruptcy view my house?

The very first thing to comprehend is that properties are viewed as assets– but no two homes 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 settle as much of your debts with your asset. This is done through equity– and if there is no equity in your home then there certainly is no real benefit to selling it.

Trustees not selling houses is happening significantly more ever since the GFC as house prices in many locations have been going south so what you paid 4 years ago may not automatically demonstrate the price nowadays.

But the biggest part with Canberra and Bankruptcy is that you definitely ought to get a specialist to help you with this process, there are a number of variables in these situations that ought to be taken into account.

For example, if you have no equity in the house you need to consider your bank loan. With loans, you are basically just a client of the financial institution and they will similarly have a choice– do they want to take your house back, or do they want you to keep the home loan? You might think that they would certainly want to just take your home to steer clear of the risk, but frankly banks are run as a business, and if these guys can leave you with a loan to keep making money off you, they generally will provided that you keep up to date with your monthly payments. But it is still up to the trustee to identify that there is lots of equity in your house the trustee will push you and the bank to sell off the house.

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 off your home, but the manner in which this is calculated in bankruptcy is typically different. When you declare insolvency you will have to note down the value of your house, and the amount that you owe– and you can figure this out by using a valuer. 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 prices– one for a Quick Sale, and one for a non-time sensitive sale. This will certainly give you 2 realistic numbers that can help you to properly value the property and understand its worth even if you are being pushed to sell promptly.

When it comes to Bankruptcy and properties, another significant point to consider is ownership, in a lot of cases houses are purchased in joint names. In other words a couple may have bought a house 50/50 utilizing both salaries to make the repayments. If one party declares bankruptcy and the other party does not, the equity is only factored on the 50 % of the property. With Bankruptcy, this is merely one of perhaps countless scenarios that are likely when it is in regards to the family home. Remember the non-bankrupt party can buy the bankrupt’s part of the house in bankruptcy also. I must repeat this but get some guidance on this area of Bankruptcy because it is very complicated and every single situation is different.

If you truly want to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then don’t hesitate to talk to Bankruptcy Experts Canberra on 1300 795 575, or visit our website: www.bankruptcyexpertscanberra.com.au.