Bankruptcy in Cairns is a complicated procedure, but I realise from meeting with thousands experiencing the possibility of going bankrupt for many years that the most frightening facet is the distress of losing the family residential property.
Nearly everyone is on an emotional level attached 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 distressing to feel that something like insolvency can sweep in and take all that away from you.
So, Will you lose your home if you go bankrupt?
My response is ‘possibly’– I realise it is not a helpful reply, but it is going to really based upon your unique scenarios. People normally believe that losing your home is unpreventable and just another part of Bankruptcy– but don’t make yourself crazy just yet, as there may be hope.
So how does personal bankruptcy view my house?
The first thing to recognize is that properties are considered as assets– but no two houses will be the same. What you ought to comprehend is that whenever it comes to Bankruptcy, they designate a trustee to oversee the procedure. Their role is to make certain that they can repay as many of your financial debts with your asset. This is performed through 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 progressively more since the GFC as house prices in many places have been heading south so what you spent 4 years ago may not immediately reflect the price nowadays.
But the biggest part with Cairns and Bankruptcy is that you definitely need to get an expert to help you with this procedure, there are a number of factors in these situations that should be taken into consideration.
For instance, if you have no equity in your property you will need to consider your bank loan. With loans, you are practically just a customer of the bank and they will similarly have a preference– will they want to take your home back, or do they prefer you to keep the home loan? You may feel that they would certainly want to just take the house to steer clear of the risk, but honestly banks are run as a business, and if these guys can leave you with a home 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 establish that there is a lot of equity in your home the trustee will push you and the bank to sell your home.
What is my home worth?
Typically 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 determined in insolvency is usually different. When you file for bankruptcy you will need to note down the value of the house, and the amount of money that you owe– and you can figure this out by utilizing 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 certainly give you 2 rational numbers that can guide you to properly value the property and appreciate its value even if you are being pushed to sell promptly.
When it comes to Bankruptcy and houses, another major point to consider is ownership, in most cases homes are bought in shared names. In other words a couple may have bought a house 50/50 utilizing both of these 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 home. With Bankruptcy, this is just one of perhaps numerous circumstances that are likely when it is in regards to the family home. Bear in mind the non-bankrupt party can buy the bankrupt’s part of the house in bankruptcy also. I should repeat this but get some guidance on this area of Bankruptcy considering that it is very tricky and each and every case is varied.
If you genuinely would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then do not hesitate to reach out to Bankruptcy Experts Cairns on 1300 795 575, or visit our website: www.bankruptcyexpertscairns.com.au.