House Has $30k or More in Equity
Bob and Sue have made the really tough decision to apply 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 house 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.
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 Mackay 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.
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 house. 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 struggling due to the fact that he injured his back. He owes $150,000 in overdue accounts to a particular hardware store who have actually been very patient with Bob and are aware of 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?
Five years ago when Bob and Sue were looking to buy a home in Queensland all they could manage to pull together was a deposit of 5%. When they bought their house they went to the bank and the bank was fine with the 5% deposit but they had to also pay for mortgage insurance coverage. Bob and Sue were happy to pay the mortgage insurance because they didn’t have the required 20% deposit to eliminate paying mortgage insurance premiums and it meant that they could purchase a house sooner.
I Have Heard My Property Can Be Tied Up for Eight Years or More When I Go Bankrupt?
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?
Bob and Sue have struck a few financial hurdles and have decided to go bankrupt. They cannot afford to keep up the mortgage payments and so have decided to walk away from their family home. The question is, once bankrupt how long have Bob and Sue got before they will be required to vacate the property?