Will I Lose My Home If I File Bankruptcy

2008-04-02

Many people who go through bankruptcy do keep their homes. It depends mostly on the amount of your equity. Your equity is:  + Value of your home - Mortgage - Estimated selling costs = Equity x Whatever percentage of the house you own = Your share of the equity Most provinces have laws that protect a certain portion of your equity from creditors. This amount is also protected in a bankruptcy.  (Seehttp://www.mnpbankruptcy.ca/page.aspx?pID=12#q8 for a list of the provincial exemptions). So, if your equity is less than or equal to the exemption amount, your home wouldn’t be affected by a bankruptcy. Of course, you have to make sure to keep your mortgage payments up-to-date. Even if your equity is higher than the exemption amount, you can often make arrangements to pay that unprotected portion into your bankruptcy over time and thereby keep your home. If you have a large amount of equity in your home, you may want to get some advice on other options such as – a Proposal to Creditors (Seehttp://www.mnpbankruptcy.ca/personal/help/creditorproposals/default.aspx ) or a second mortgage or a debt consolidation which, depending on your circumstances, could effectively resolve your debt problem and allow you to keep your home. Judy Scott – Port Moody - Vancouver – Abbotsford, BC 604-949-2100