Bankruptcy in Alice Springs is a difficult task, but I realise from meeting with thousands facing the chance of personal bankruptcy for many years that the most frightening element is the concern of losing the family home.
Almost every person is on an emotional level connected to their house – it’s where the kids have grown, 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 bankruptcy can sweep in and take all of that off you.
So, Could 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 on your unique circumstances. People normally think that losing your house is unpreventable and just another part of Bankruptcy– but don’t drive yourself crazy just yet, as there could be hope.
So how does bankruptcy view my house?
The first thing to comprehend is that homes are deemed assets– but no two homes will be the same. What you need to grasp is that whenever it concerns Bankruptcy, they designate a trustee to oversee the procedure. Their job is to make sure that they can pay off as much of your financial obligations with your asset. This is completed through equity– and if there is no equity in your home then there certainly is no true advantage to selling it.
Trustees not selling residential properties is happening 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 automatically demonstrate the price nowadays.
But the biggest part with Alice Springs and Bankruptcy is that you really need to get a professional to help you with this process, there are a number of factors in these situations that ought to be considered.
For example, if you have no equity in the house you need to consider your bank loan. With loans, you are essentially just a customer of the bank and they will similarly have a preference– will they wish to take your house back, or do they want you to keep the loan? You might expect that they would certainly want to just take your home to steer clear of the risk, but honestly banks are run as a business, and if these guys can leave you with a loan 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 identify that there is lots of equity in your property the trustee will push you and the bank to sell off your home.
What is my home worth?
Often with Bankruptcy it is hard to know what your home is really worth– indeed, you may have an idea if you were selling off your house, but the manner in which this is worked out in insolvency is usually varied. When you file for insolvency you may 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 far more precise than using your ‘gut feel’ or a real estate agent. The other important factor is that you will need 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 appreciate its worth even when you are being pressed to sell swiftly.
When it comes to Bankruptcy and properties, another major factor to consider is ownership, in many cases houses are bought in joint titles. In other words a couple may have bought a house 50/50 utilizing both salaries 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 merely one of perhaps various circumstances 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 also. I must repeat this but get some advice on this area of Bankruptcy considering that it is very tricky and every scenario is varied.
If you truly want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Experts Alice Springs on 1300 795 575, or visit our website: www.bankruptcyexpertsalicesprings.com.au.