Bankruptcy in Geelong – Worried about losing your home?

Bankruptcy in Geelong is a tough process, but I realise from meeting with thousands encountering the likelihood of personal bankruptcy over the years that the most terrifying aspect is the distress of losing the family residence.

untitled-1Practically every person is on an emotional degree attached to their home – it’s where the children have grown up, it’s the place you sleep, eat, relax and built it from a house to a home. So it is frightening to feel that a thing like bankruptcy can sweep in and take all that away from you.

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

My answer is ‘maybe’– I understand it is not an useful reply, but it will really based upon your unique circumstances. People typically believe that losing your house is inevitable and just another part of Bankruptcy– but don’t drive yourself crazy just yet, as there may be hope.

So how does bankruptcy view my house?

The 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 when it concerns Bankruptcy, they appoint a trustee to oversee the process. Their job is to make sure that they can settle as many of your financial obligations with your asset. This is performed via equity– and if there is no equity in your home then there certainly is no real benefit to selling it.

Trustees not selling homes is happening increasingly more ever since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not immediately reflect the price these days.

But the most significant part with Geelong and Bankruptcy is that you definitely ought to get a professional to assist you through this procedure, there are plenty of variables in these scenarios that ought to be taken into consideration.

For instance, if you have no equity in the house you will need to think about your bank loan. With loans, you are essentially just a customer of the financial institution and they will similarly have a preference– will they want to get your home back, or do they prefer you to keep the loan? You may believe that they would certainly want to just take the house to avoid the risk, but honestly financial institutions are run as a business, and if they 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 repayments. But 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 your home.

What is my home worth?

Usually with Bankruptcy it is difficult to know what your house is actually worth– indeed, you may have an idea if you were selling your house, but the manner in which this is worked out in insolvency is usually different. When you file for insolvency you will need to note down the value of your home, and the amount that you owe– and you can work this out by utilizing a valuer. This is going to be far more accurate than applying your ‘gut feel’ or a real estate agent. The other important factor is that you need to ask your valuer for two valuations– one for a Quick Sale, and one for a non-time sensitive sale. This will certainly give you 2 rational numbers that can assist you to effectively value the property and understand its worth even when you are being pushed to sell swiftly.

When it comes to Bankruptcy and properties, another major factor to consider is ownership, in many cases houses are purchased in shared names. In other words a couple may have bought a house 50/50 using both salaries to make the repayments. If one party declares bankruptcy and the other party does not, the equity is solely factored on the 50 % of the property. With Bankruptcy, this is merely one of quite possibly various circumstances that are probable when it relates to the family home. Remember the non-bankrupt party can buy the bankrupt’s part of the house in insolvency also. I must repeat this but get some guidance on this area of Bankruptcy because it is very tricky and every single 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 reach out to Bankruptcy Experts Geelong on 1300 795 575, or visit our website:

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