Owning a house is a dream many people have and many individuals from Guelph have made that dream a reality in the residential community. But with any home ownership, there are significant costs associated with it – mortgage payments, property taxes, furnishing the rooms, repairs and maintenance, renovations, etc. The cost of the house and upkeep along with other commitments and debt obligations can become unmanageable and some individual explore the options of a consumer proposal or personal bankruptcy in hopes of keeping their home. The option that allows the debtors to keep or protect their house will depend on any potential equity in their house.
Under a personal bankruptcy, the bankrupt individual’s assets vest with the trustee, but the trustee generally will only realize on the assets if there is equity in the property. Therefore, if there is an estimated net loss in the equity calculation using the current market value of the house, then the trustee will not realize on it and the bankrupt may be able to deal with the secured mortgage holders to keep it.
If there is equity in the property, then a personal bankruptcy may not be the logical option to allow the individual to keep their home, but a consumer proposal would. In a consumer proposal, the individuals keep control of their assets. As the real estate market has increased over the past several years, the equity in houses become larger.
If you are experiencing financial difficulty and want to protect your house, then we suggest you contact our Guelph office at 519-310-PLAN or e-mail us a question. We encourage individuals to obtain a market value opinion letter or an appraisal from a real estate agent so that their options can be explored in greater detail.
