Is It Possible To Save The House If You Are Going To Declare Bankruptcy Due To The Credit Card Debts

Hello, Bankruptcy discharges your unsecured debts with some exceptions (e.g. child support or alimony). It does not interfere with the rights of a secured creditor so if you have a mortgage on your property you would continue to make this payment during the course of a bankruptcy subject to some of the comments below. The ability to keep your home while in bankruptcy depends on the extent to which there is equity in the property. For example, if there is $20,000 of non-exempt equity in the property, it could be sold in the bankruptcy (depending on the province in which you reside) with the funds being disbursed amongst your unsecured creditors. If there is only a small amount of non-exempt equity (e.g. $2,500) you could probably buy back the equity from the bankruptcy estate and keep the home. There are many variables at play here such as fair market value of the home, the amount owing on the mortgage, hypothetical closing costs, possible homestead rights, right to claim an equity exemption etc. In Manitoba an individual can claim an equity exemption of $2,500 on their home if owned solely or $1,500 if owned jointly with another individual. In other provinces such as Alberta the exemption one can claim on their home, or what is called "real property," is much higher. The exemption to which you may be entitled varies by province. In addition, the ability of a Trustee to sell a bankrupt individual's home can vary by province. You would have to discuss the situation in more detail with a Trustee in your area. If you have a lot of equity in your home, bankruptcy may not be the best solution. For example, you may be able to consider a refinance of your mortgage that enables you to take some of the equity from your home and pay down your unsecured debts. A Consumer Proposal might also be an option to explore in this instance. Brad Milne, CIRP Trustee in Bankruptcy Brandon, Manitoba