House Has $30k or More in Equity
So, in Western Australia, what will happen to their home when they file for bankruptcy? In this case study we can consider the equity as anything above $30,000 so this would be the same scenario as if their equity was $30,000, $100,000, $300,000 or $1,000,000 it doesn’t make any difference the principle is the same.
Surrendering the House to the Bank.
So, Bob and Sue decide to surrender their home to the bank. The very first thing we at Bankruptcy Joondalup would do for them is get them to sign a legal document which is like a deed of release meaning they have voluntarily surrendered their home. This means the bank does not need to pursue legal action to have them removed from the house.
A Question of Caveats
Bob is a builder in WA and has really been struggling since he hurt his back. He owes $150,000 in overdue accounts to a particular hardware outlet who have actually been very patient with Bob and understand his situation.
When The House is in Your Partners Name and They Don’t Need to Go Bankrupt.
Why Would You Go Bankrupt If You Had Equity In Your House?
But I Have Mortgage Insurance?
I Have Heard My Property Can Be Tied Up for Eight Years or More When I Go Bankrupt?
Let us take a look at under what circumstance your house could be tied up for more than the 3 year minimum bankruptcy period. Let us say that when Bob and Sue went bankrupt they decided that they wanted to try and keep their Joondalup house after bankruptcy. At the time they went bankrupt the house was worth $700,000 and they still owed the bank the full $700,000.
What If I Decide to Hand the House Back to the Bank When I Go Bankrupt, How Long Do I Have Before I Am Required to Leave?
I Bought a House With Compensation Money, Is That Money Safe If I Go Bankrupt?
Bob and Sue have been residing in their family home for several years. About five years ago Bob had a major accident at work, he received a big compensation payout from his employer which he put into the house mortgage. The question is, if Bob makes a decision to declare bankruptcy is that compensation money safe or will he lose it?