House Has $30k or More in Equity
Bob and Sue have made the very difficult decision to file for bankruptcy, the biggest concern is their family house on which they have a mortgage for $670,000. Their home is valued at $700,000 so they have $30,000 equity in the property. So, in Queensland, what will happen to their home when they declare 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.
Bob and Sue have come to the tough decision to declare bankruptcy and they are considering what to do with the house as they have no equity in it and they simply cannot afford the mortgage any longer.
So, Bob and Sue choose to surrender their home to the bank. The very first thing we at Bankruptcy Experts Brisbane 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 house. This means the bank does not have to pursue legal action to have them removed from the house.
A Question of Caveats
Bob and Sue have owned a property for several years, have worked really hard and have $200,000 equity in their home. Their house is valued at $700,000 and they presently have about $500,000 on their mortgage.
Bob is a builder in Qld and has really been having a hard time due to the fact that he injured his back. He owes $150,000 in unpaid accounts to a particular hardware store who have 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.
Bob is seriously considering bankruptcy and believes that he has no choice. He has grave concerns because his wife Sue owns the Brisbane home that they reside in and he is very concerned about what will happen to that property should he apply for Bankruptcy. In this case study we explore what happens to the property when the house is purely in Sue’s name and Bob’s name is neither on the title nor on the home mortgage.
Why Would You Go Bankrupt If You Had Equity In Your House?
Bob and Sue have owned their Brisbane home for years and have actually worked really hard to build up some equity in the property. Their house is presently valued at $700,000 and they owe the bank $600,000 giving them $100,000 equity. In this case study Bob and Sue have a combined debt of $180,000, far greater than the $100,000 equity they have in their house.