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What happens to your home

Bankruptcy does not always mean that you will lose your home.

When you become bankrupt, your Trustee becomes the owner of your interest in your home.

Saving your home will mainly depend on the amount of equity in your home.

Read below and please call us with any other questions.

What if there is equity in your home?

As an example, you owe $200,000 on your mortgage and the current market value of your home is $220,000. This means that there is some equity in your home.

You have a number of options.

You can purchase your interest from your Trustee, in which case it becomes yours after bankruptcy is over.

Somebody else such as your partner or a family member can purchase your interest from your Trustee.

You can choose to do nothing.  However, in that case, even if you are discharged, the Trustee will still have a claim over your interest and may choose to sell.

Unless you want to walk away from your home, you must remember that the mortgage must be paid.  Otherwise, the mortgagee bank is likely to sell your home.

What if there is equity in your home?

No equity means that you owe more to the mortgagee bank than your home is worth.

Your Trustee still has an interest in your home and the right to sell it, even if there is no equity.  However, your Trustee is more likely to ask if somebody wants to buy that interest.

In other words, your options are essentially same as above except that there will likely be less to pay to the Trustee.

Still got questions about your situation?

Please call us for a chat

1300 861 455

 

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