Can I keep my house, condo and car if I go bankrupt in Ontario?

Question: I have no mortgage on my house and both of my cars(under my name) are paid for,one is worth $3500 - wife uses and the other $6500 - I use. My total debt is roughly $460,000 and my home is only worth $320,000. I have a boat worth $230,000 which has a mortgage for the same value of the boat, using the equity of the house to secure it. I also have a condo that I co signed with my parents which has a mortgage. My parents can afford to make the payments on the condo mortgage on their own. Will I be forced to sell my house or the condo or one of my cars if I declare bankruptcy in Ontario?

Answer: If you own a house with no mortgage when you go bankrupt in Ontario, you are required to either surrender the house to the trustee, or give the trustee the equivalent cash value (presumably by borrowing from a family member or other source, which is difficult to do).

If you own a house or condo that is fully mortgaged, the trustee will not take it, since it has no equity value. The same is true of a car or boat secured by a loan for it's full value.

In Ontario you are permitted to keep one car worth $5,650 or less, so if you own two cars, with no liens against them, you would either be required to surrender one of the cars, or buy the car back from the trustee.

You have many different options for dealing with your debts, so we suggest that you contact an Ontario trustee for further information.

Labels: bankruptcy Ontario, bankruptcy trustee, what do I get to keep if I go bankrupt?