Will I lose my house under a consumer proposal?

_{consumer proposal, debt management, Ontario}

A consumer proposal is a way to negotiate with creditors to repay part of your debt over up to five years. Worried about your home? If you keep up with mortgage and proposal payments, you’re usually fine. They’ll check your home’s value to ensure everything’s fair.

_{Consumer proposal: smart debt management for homeowners.}

Question

Will I lose my house in a consumer proposal? I’m really worried about what happens to my home if I go through with a consumer proposal. It’s such a big part of my life, and I’m not sure how this process affects it. Can someone explain how this works?

From: Anonymous Question, Ontario (ON)

Debt Insiders Answer

In Canada, a consumer proposal is like striking a deal with your creditors to pay back a slice of what you owe over a few years, usually up to five. Worried about your home? Don’t be, as long as you’re on top of your proposal’s terms. Keep those mortgage payments on track, manage your proposal payments, and your home should be all good. Just a heads up, though—your home’s value might get a look-over to make sure everything’s on the up and up and that you’re not sidestepping any commitments.

From: Anonymous Question

Office of the Superintendent of Bankrupty (OSB) Answer

Under a consumer proposal in Canada, you generally do not lose your house, as long as you continue to make your mortgage payments and your home equity does not exceed the exempt amount specified by provincial laws. Most provinces allow you to keep your home if you can manage the mortgage payments.

Specifically, the Bankruptcy and Insolvency Act provides provisions for consumers to retain their primary residence so long as they are not in default on their mortgage and the equity in the property does not exceed exemptions set by the province (see section 67 of the Bankruptcy and Insolvency Act). Additionally, the regulations regarding consumer proposals indicate that assets necessary for employment and everyday living, including your home (considering mortgage obligations), can often be exempt from surrender (see regulations under SOR/2007-256).

It is always advised to consult with a licensed insolvency trustee to understand how your specific situation interacts with these rules, as factors like home equity and locality can impact what happens to your home during a consumer proposal.

From: This answer is provided by scanning the OSB Bankruptcy & Insolvency Act and related directives

Related Questions

Here are the top 5 most frequently asked questions related to the concern of losing a house when filing a consumer proposal, based on the provided sources and general online trends:

1. Will I lose my house if I file a consumer proposal?

No, your house cannot be repossessed as long as you make your mortgage payments.

2. How does a consumer proposal affect my mortgage payments?

You must continue to make your mortgage payments to keep your home.

3. Can I keep my home if I have equity in it during a consumer proposal?

Yes, but you may need to include the equity value in your proposal payments to creditors.

4. What happens to my home if I am renting and file a consumer proposal?

Your rental agreement is not affected as long as you keep making your rent payments.

5. Can I sell my house during a consumer proposal?

Yes, you are free to deal with your assets, including selling your house, during a consumer proposal.

References

_{Table of article references}