Archive for the ‘house’ Category

Question: I am out of work waiting for ei. My bills are getting to much to pay i owe about $6,000 credit card and loan. Me and my wife are separated and she is making the mortgage payments on the house but its still in both are names. How will this affect my chances for bankruptcy in Ontario and how will this affect her?

Answer: The answer depends on the value of your house, and the amount owing on the mortgage.

The difference between what the house is worth, and what’s owing on it (the mortgage) is your equity. Since you and your ex-wife jointly own the house, you are each entitled to half of the equity. If you go bankrupt, you are required to give the trustee your share of the equity. If your share of the equity is a small number, it’s probably not an issue. If it’s a big number, the only solution may be to sell the house.

The first step is to get an appraisal done on the house by a local real estate agent, and get confirmation from the bank as to the amount owing on the mortgage. An Ontario bankruptcy trustee can then provide you with more detailed information.

Another good source of information is this article on What Happens to My House if I go Bankrupt?

Question: What happens if I declare bankruptcy in Ontario and if my house is worth less than the mortgage ?

Answer: You have two choices.

First, you could surrender the house to the mortgage holder prior to going bankrupt. They would eventually sell the house, and the resulting shortfall would be included in your bankruptcy.

Or, you could keep the house, and keep making the mortgage payments. In most cases the mortgage company will allow you to keep the house. However, you need to decide if it makes sense to keep paying for a house that has negative equity.

For more information, here is an article on What Happens to My House in Bankruptcy?

Question: If my house is included in the assets of my bankruptcy, how long do I have before I must vacate?

Answer: It is not clear from your question whether or not you intend to keep your house or surrender it as a result of your bankruptcy. A detailed discussion of houses and bankruptcy can be found in this article on What happens to my house in Bankruptcy?

If your house is worth less than what is owing on your mortgage, and therefore you are surrendering your house to the mortgage company when you go bankrupt, when they will actually take the house will depend on how far in arrears you are now. If your payments are current, it will probably be many months before they complete the foreclosure and take your house. If they have already started foreclosure proceedings than you would have less time. Your trustee can review your situation and give you a more accurate estimate based on the facts of your case.

Question: Our house is in both mine and my husbands name, with both of us being on the mortgage. Our house is valued at 174,000 and we still owe 160,000 on the mortgage. I am looking at going bankrupt, but not my husband. I owe 60,000 in student loans and can’t keep up with the payments. Our mortgage is not behind, but can we keep our house or will we lose it if I go bankrupt and how will this affect my spouse?
If he is still able to pay the mortgage will this affect me? Any info is appreciated.

Answer: Yes, you can keep your house if you go bankrupt. You will need to get a house appraisal and a print out from the bank of the amount owing on your mortgage; from that your trustee can calculate your share of the equity in the house. If there is any equity, you would be required to pay that amount while bankrupt. In your case there is probably very little equity.

Your bankruptcy trustee can explain the calculation in more detail.

Question: I am currently in financial trouble after loosing my job over a year ageo. I am currently working but I am drowning in debt and need a fresh start. I have two homes both in my name where the principal residence is in trust at 50% for my cousin. The second home is my cousins but morgaged to me. Since I was unemployed and the debts are stressing I feel I have no option but to file for bankruptcy. My question is will I have to surrender the second home just because its in my name neither home have equity.

Answer: Yes, you can keep your home if you file bankruptcy in Ontario. If there is no equity, the trustee won’t take your house or houses.

However, if you are unemployed and are worried about making the payments on the house, it may be more logical to simply surrender the houses back to the mortgage company, and then any resulting shortfall would be included in your bankruptcy.

There is no correct answer in your situation, so you should discuss your decision in detail with an Ontario bankruptcy trustee before you make your final decision.

Question: I owe $72,000 and I have mortgage of $308,000 my house worth now $310,000 if i want to sell plus broker commission so if i declare bankruptcy would i lose my house?

Answer: If your house has $2,000 in equity before selling costs the trustee would most likely not take your house if you declared bankruptcy. You would need to confirm with the mortgage company that they will also allow you to keep your house.

If you cannot afford the house, it may be better to surrender the house prior to declaring bankruptcy so that the resulting shortfall, if any, is included in the bankruptcy.

More information can be found in this article on what happens to my house after I file bankruptcy in Ontario?

Question: We have had our house for sale with no luck, for almost a year now. When and if we do sell we will be at least $30K in the hole after commissions, mortgage paid etc. I cannot do a proposal or a bankruptcy as I work in the Financial Industry and will lose my job if this occurs. Therefore we wondered if we walked away from the house, is it the same on my bureau as a bankruptcy? If they come back to us asking for us to pay a shortfall, it will likely be less then the $30K we will owe if we sell. Or can we do a bankruptcy just in my husbands name….but all our debt is joint…we are in a bad position and need some guidance, any thoughts?

Answer: If you walk away from the house, the mortgage holder will eventually foreclose, sell it, and then pursue you for the shortfall. If the shortfall would be $30,000 if you sold it yourself, the shortfall would probably be $50,000 or higher if the bank sells it, since they will get less under foreclosure, and they will want to recoup all of their legal fees.

Your first option would be to attempt to make a deal with the bank where they agree to let you sell the house, and then you work out repayment terms for the shortfall. That maximizes the amount of money going to the bank, so they may agree to it.

If you can’t make a deal and simply walk away, your credit report will reflect a bad debt, which, given the amount, is almost as damaging as a bankruptcy.

Just your husband could go bankrupt, but since you have co-signed the mortgage, the bank will eventually pursue you as well.

It is possible to file a consumer proposal or go bankrupt and keep your job; each employer is different; they may reassign you to other duties. You should discuss this in detail with your employer, and then consult a trustee for a detailed evaluation of the implications of all of your options.

Question: I have a mortgage and i can afford the morgage , but the bank said there is not even equity in the house to remortgage, to pay off my other depts. Would i looe the house if i claimed bankruptsy.

Answer: If there is no equity in your house (meaning the amount owing on the mortgage is about what the house is worth), the trustee will not take your house if you file for bankruptcy in Ontario. In most cases the bank will allow you to keep your house, provided you continue to pay the mortgage.

However, every case is different, so we suggest you talk to an Ontario bankruptcy trustee to review your situation and advise you on whether or not you would lose your house if you filed for bankruptcy.