Bankruptcy in Albury is a difficult procedure, but I realise from meeting with thousands dealing with the likelihood of bankruptcy throughout the years that the most frightening aspect is the fear of losing the family residential property.

untitled-1

Almost everyone is on an emotional level attached to their home – it’s where the children have grown, it’s where you sleep, eat, relax and built it from a house to a home. So it is terrifying to think that a thing like personal bankruptcy can sweep in and take all that from you.

So, Will you lose your home if you go bankrupt?

My response is ‘possibly’– I understand it is not an useful response, but it is going to really based on your particular scenarios. People typically believe that losing your home is inevitable and just another part of Bankruptcy– but don’t drive yourself mad right now, as there could be hope.

So how does bankruptcy view my house?

The very first thing to know is that houses 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 process. Their role is to make sure that they can settle as much of your financial 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 occurring considerably more ever since the GFC as house prices in many locations have been going south so what you paid 4 years ago may not instantly demonstrate the price today.

However the biggest part with Albury and Bankruptcy is that you really need to get a professional to help you through this process, there are a number of variables in these scenarios that ought to be taken into consideration.

For instance, if you have no equity in your home you will need to think about your home loan. With loans, you are basically just a client of the bank and they will similarly have a choice– do they want to get your home back, or do they want you to keep the loan? You might believe that they would certainly wish to just take your home to avoid the risk, but honestly banks are run as a business, and if they can leave you with a loan to keep generating income off you, they generally will provided that you keep up to date with your repayments. However it is still up to the trustee to establish 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 house worth?

Usually with Bankruptcy it is difficult 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 calculated in personal bankruptcy is usually varied. When you declare insolvency you will have to note down the value of the house, and the amount that you owe– and you can work this out by using a valuer. This is going to be much more precise than applying 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 give you 2 realistic figures that can assist you to correctly value the residential property and understand its value even if you are being pressured to sell promptly.

When it comes to Bankruptcy and properties, another major point to consider is ownership, in a lot of cases homes are bought in joint names. In other words a couple may have bought a house 50/50 using both of these 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 merely one of probably various instances that are likely when it is in regards to the family home. Bear in mind the non-bankrupt party can purchase the bankrupt’s part of the house in bankruptcy also. I should repeat this but get some guidance on this area of Bankruptcy since it is very complicated and every situation is different.

If you genuinely wish 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 Albury on 1300 795 575, or visit our website: www.bankruptcyexpertsalbury.com.au.