How to file bankruptcy and keep your house?

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Want to keep your house if you’re filing for bankruptcy in Canada? Check your equity by subtracting mortgages and selling costs from your home’s value. States like Ontario and Saskatchewan have limits—$10K and $50K respectively. Stay below these and keep your home; over it, and you might need to sell or pay the excess. Consider a consumer proposal to manage debt while holding onto your home. Licensed Insolvency Trustees are funded by lenders and creditors, not by Canadians facing debt issues. They can also charge extra fees or bill you twice. Stay aware! Contact us through phone, text, or live chat for support.

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File Bankruptcy And Keep Your House Question

How to file bankruptcy and keep your house? I need to understand if it’s possible to protect my home while filing for bankruptcy and how to do it.

From: Anonymous Question
Location: Nanaimo, British Columbia (BC)
Category: personal bankruptcy

File Bankruptcy And Keep Your House Answer

To safeguard your residence while navigating bankruptcy in Canada, begin by calculating your home’s net equity. Simply subtract your mortgage balance and any selling costs from the property’s market value. Provinces have varying equity limits; for example, Ontario offers an exemption for up to $10,000 in equity, while Saskatchewan is more generous at $50,000 per owner. If you’re under the threshold, you can likely hang onto your home as long as those mortgage payments keep rolling. Go beyond the limit, and you might have to fork over the excess to your bankruptcy trustee or consider putting up the “for sale” sign. But hey, it’s not all doom and gloom—alternatives like consumer proposals let you pay off dues in manageable chunks while keeping your home sweet home, as long as you’re on top of the mortgage game.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

To file for bankruptcy in Canada and protect your home, you need to be aware of the exemptions available under the Bankruptcy and Insolvency Act and relevant regulations. In many cases, your primary residence can be exempt from seizure, but this largely depends on the equity in the home and provincial regulations.

1. Homestead Exemption: The Homestead Act offers certain protections for your primary residence. The specific exemption amounts will vary by province, so you should consult the relevant provincial laws to understand how much equity is protected.

2. Equity Consideration: If your home has significant equity exceeding the exemption limit, the bankruptcy trustee may have the right to sell the property to pay creditors. Therefore, ensuring that your equity is within the exempted limit is crucial.

3. Federal Regulations: Section 67 of the Bankruptcy and Insolvency Act stipulates what property can and cannot be seized during bankruptcy. This includes potential exemptions.

4. Provincial Regulations: Check the relevant provincial regulations under regulations like C.R.C., c. 369 and SOR/2007-256 for specific details on homestead exemptions.

5. Consult a Licensed Insolvency Trustee: It’s advisable to engage with a Licensed Insolvency Trustee who can provide personalized advice based on your specific financial situation and help you navigate the complexities of the bankruptcy process.

By ensuring your equity is within the exempted limits and understanding the specific regulations in your province, you can often file for bankruptcy and maintain your home.

From: OSB Helper

Related Questions to How To File Bankruptcy And Keep Your House

Here are the top 5 most frequently asked questions related to filing bankruptcy and keeping your house, based on common concerns and search trends:

1. How much equity can I have in my home to keep it during bankruptcy?

You can keep your home if the net equity does not exceed the provincial exemption limit, which varies by province (e.g., $10,000 in Ontario)[1][3][5].

2. Do I need to sell my house if I file for bankruptcy?

You do not need to sell your house if the equity is within the provincial exemption limit; otherwise, you may need to pay the excess equity to the trustee or consider a consumer proposal[1][3][5].

3. Can I keep my house if I file a consumer proposal instead of bankruptcy?

Yes, filing a consumer proposal can allow you to keep your house by including the equity value in your payment plan to creditors[3][4][5].

4. How does the process of calculating home equity work in bankruptcy?

Home equity is calculated by subtracting the mortgage, selling costs, and other secured debts from the market value of your home[1][3][5].

5. Will I still need to make mortgage payments if I file for bankruptcy?

Yes, you must continue making mortgage payments and stay current on property taxes to keep your home during bankruptcy[1][3][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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