Windsor Ontario Personal Bankruptcy Blog: January 2007: Answers to Personal Bankruptcy Questions

Posted on Monday, January 22, 2007

Can I keep my house if I file for bankruptcy?

As a Windsor trustee, this is a common question.

First question - is there equity in the house. Equity means if you sold you house, after paying the mortgage and costs would there be money left over? If there would be bankruptcy may not be for you. The money that would be left over belongs to the bankruptcy and you would have to pay it to your bankruptcy. If the amount is large enough a consumer proposal might also be something to consider.

If there isn't equity, as long as the mortgagor agrees, the bankruptcy will not take your house.

Posted on Monday, January 08, 2007

What happens to the debt after a consumer proposal is completed?

I had a debtor come in today to make the final payment under the terms of his consumer proposal. He was a very happy person.

He had heard a rumour that now that the proposal is done, he now has to make repayments for the balance of the debt. He didn't think it was so, and just wanted confirmation. I told him that expect for some circumstances (such as student loans that are less than 10 years old), this is not true. A clause in the proposal states that if the creditors accept the consumer proposal it is for final settlement of the debt.

If you have a question, feel free to send me an email.