Bankruptcy And Foreclosures

2009-02-18

Author: Donna Carson

I have two properties one is a primary residence and the other is a rental. The renters put a grow op in the basement and it was seized. I can't afford to fix the house and the mortgage is higher than the house is worth. Can I file for bankruptcy after foreclosure? Will I lose my primary home?

Person talking on their cellphone looking over paperwork
Bankruptcy would be an option that would deal with this shortfall if you are unable to pay it.  Which option will be best will depend on your other creditors and what your budget looks like.  Will the insurer write off the shortfall?

If you file for bankruptcy and Alberta is your province of residence, you are allowed to retain $40,000 equity in your principal residence.  If you have less than $40,000 equity in this residence, so long as you make the mortgage payments and comply with your bankruptcy duties, your house will be fine.  If you have more than $40,000 equity, you and your Trustee will meet to review how to deal with this non-exempt equity.

If you have any other questions, don't hesitate to contact one of our Trustees or Counselors.

 

Donna Carson

Donna Carson

CIRP, LIT, CPA

Senior Vice President

Servicing: Calgary (Downtown), Red Deer, Drumheller, Calgary (NE), Airdrie

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