Bankruptcy in Sydney– Stressed about losing your home?
Bankruptcy in Sydney is a complicated task, but I realise from meeting with thousands facing the chance of going bankrupt over the years that the most terrifying element is the concern of losing the family residence.
Practically every person is on an emotional degree linked to their home – it’s where the little ones have grown, it’s the place you sleep, eat, unwind and built it from a house to a home. So it is frightening to think that something like insolvency can sweep in and take all of that from you.
So, Will you lose your home if you go bankrupt?
My answer is ‘maybe’– I realise it is not a helpful answer, but it will really depend on your unique scenarios. People normally think that losing your house is inevitable and just one more part of Bankruptcy– but don’t make yourself mad just yet, because there could be hope.
So how does 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 really should understand is that whenever it comes to Bankruptcy, they appoint a trustee to oversee the procedure. Their job is to make certain that they can repay as much of your financial debts with your asset. This is completed through equity– and if there is no equity in your house then there is no true benefit to selling it.
Trustees not selling residential properties is occurring progressively more ever since the GFC as house prices in many locations have been going south so what you spent 4 years ago may not instantly demonstrate the price nowadays.
However the biggest part with Sydney and Bankruptcy is that you definitely should get a specialist to help you through this process, there are lots of variables in these situations that should be considered.
For example, if you have no equity in your property you will need to take into account your bank loan. With loans, you are essentially just a customer of the bank and they will also have a choice– will they wish to take your house back, or do they prefer you to keep the loan? You may believe that they would want to just take the house to avoid the risk, but frankly banks are run as a business, and if these guys can leave you with a mortgage to keep generating income off you, they generally will provided that you keep up to date with your monthly payments. However it is nonetheless up to the trustee to establish that there is lots of equity in your property the trustee will push you and the bank to sell the house.
What is my home worth?
Typically with Bankruptcy it is difficult to know what your house is really worth– yes, you may have an idea if you were selling off your house, but the manner in which this is determined in personal bankruptcy is usually varied. When you declare bankruptcy you will need 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 applying 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 give you 2 realistic amounts that can assist you to properly value the property and understand its value even if you are being pressured to sell promptly.
When it comes to Bankruptcy and properties, another major factor to consider is ownership, in a lot of cases homes are purchased in joint names. In other words a couple may have bought a house 50/50 making use of 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 residential property. With Bankruptcy, this is just one of probably various instances that are likely when it is in regards to the family home. Remember the non-bankrupt party can purchase the bankrupt’s part of the home in bankruptcy too. I must repeat this but get some guidance on this area of Bankruptcy because it is very complicated and every case is varied.
If you genuinely 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 Sydney on 1300 795 575, or visit our website: www.bankruptcyexpertssydney.com.au.