Frequently Asked Questions
- Can I Keep My House?
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<p>It is generally possible for a person to keep their house when they file for bankruptcy or file a proposal to creditors.</p>
<p>Any debtor in B.C. outside of the Lower Mainland area is entitled to equity in their principal residence of $9,000. (Exemption rules vary by province.)</p>
<p>Equity is calculated by deducting the total amounts owing on a mortgage and any property tax arrears from the market value of the property. If the equity is under $9,000 the house may be claimed exempt. There is no equity allowance if you do not live in the property.</p>
<p>If the equity exceeds $9,000 it is still possible to retain the property subject to the excess amount being made available to the Trustee, for the creditors (arrangements must be satisfactory to the Trustee and creditors if the amount is large).</p>
<p>Your mortgage company is not able to foreclose if your payments are with the them and there are no other acts of default under the mortgage.</p>
<p>If you have arrears on your mortgage or if you have in anyway violated your mortgage it may be tougher to retain the property. You may be wise to make arrangements with your mortgage company to catch up any arrears prior to filing a proposal or for bankruptcy ("filing").</p>
<p>Your mortgage company will be notified by the Trustee upon filing.</p>
<p>The mortgage is not "excluded" from these proceedings, it is simply treated differently as it is a secured debt, i.e. a debt in which an asset (the house) is held as collateral.</p>
<p>If a foreclosure has been commenced it will be difficult to retain your house. The lender has a right to foreclose in order to protect their investment if you fail to make the payments called for in the mortgage. In a foreclosure however the court will give a borrower some time to catch up which is referred to as a "Redemption Period". It can be as little as a day or as much as 6 months, or longer in some circumstances.</p>
<p>Renewal of the terms of a mortgage is normally routine but a lender is not obligated to renew if they do not want to. In order to avoid the likelihood of this problem it may be worth renewing the mortgage for as long a period as possible prior to filing.</p>
<p>A 3-5 year term will generally allow you adequate time to resolve your financial difficulties and to commence the process of re-establishing your credit rating, thereby removing the issue of renewal in the short term.</p>
DISCLAIMER
All of the information on this website is provided as general information to those seeking general answers to their questions.
This information should not be construed as professional advice.
Every insolvency situation is different and the outcome of each will very depending on its unique circumstances.
Do not rely on this information, or take any steps which are based upon this information without first seeking professional advice.
To obtain specific professional advice a questionnaire must be completed and a personal evaluation conducted by our Trustee.