My name is Adam Rauf and I’m the associate who works in the Guelph office for Hoyes, Michalos and Associates Inc. and I’m currently in the process of becoming a licensed Trustee In Bankruptcy.
One of the most common questions I am asked is “If I declare bankruptcy can I keep my house?”
The short answer is yes, you can keep your home if you file for bankruptcy. However there’s one catch: Equity.
Yuo can read more about this on our main website, What Happens to my House in Bankruptcy?
If your house will sell for more than the mortgage owing (after deductions for legal fees, real estate costs and commission fees), the difference will have to be paid into your bankruptcy. For example, if there is $10,000 of realizable equity in your home, then you will be required to pay $10,000 into your bankruptcy estate to keep your home. You will also be required to keep making your mortgage payments. If there is no equity in your home and you maintain your monthly mortgage payments then filing a bankruptcy should not have an impact on your home.
I met with a married couple recently who lived here in Guelph, and they did have about $10,000 in equity in their home. They had other debts that they were having trouble paying (he was no longer getting overtime at work), and they couldn’t afford to pay $10,000 up front in a bankruptcy. They had children, and wanted to keep their home. In addition to their mortgage payments, they were also paying about $1,200 per month in payments on their other unsecured debts.
I explained their options, and they decided to file a consumer proposal. Based on their situation (their monthly income, the size of their family, and the value of their home), we were able to offer a proposal to their creditors where they offered $500 per month for 50 months. The creditors accepted the consumer proposal, and the couple are very happy, because they can afford one monthly payment of $500 to deal with their debts.
Do you have equity in your home, but have other debts? A consumer proposal may be a solution for you.
To find out if a consumer proposal is right for you, give me a call in Guelph at 310-PLAN, or e-mail me, and we can discuss your options and arrange a no charge initial consultation. There is hope, so give me a call, and let’s get started.
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