Bankruptcy-To go bankrupt without losing one’s home, is it possible?

If the market value of your home is lower or very close to the balance of your mortgage, it means that virtually no profit could be drawn from the sale of your home. If this is the case, unless you tell the trustee otherwise, you should be able to keep your house in the bankruptcy. You will, of course, continue to make your mortgage payments.

Equity less than the sum of the debts

Equity less than the sum of the debts

If by selling your home you would be able to make a profit, your home may have to go on sale as part of bankruptcy in order to pay your creditors.

On the other hand, if you want to keep your home, you should consider the consumer proposal. As part of a consumer proposal, you will repay a portion of your debts over a period of up to 5 years and can keep your assets (car, house, etc.).

Fairness greater than the sum of debts


If you are able to make a profit from selling your home greater than the sum total of your debts, bankruptcy is not your best solution. Selling your home could allow you to pay off your debts and maybe even make a profit.

If you do not want to sell your home, one way to pay off your debts may be to refinance your home to make enough money to pay off your debts. You can contact your bank or a private lender if you so choose.

If you are not eligible for refinancing, you might consider a consumer proposal in which a 100% repayment of your debts is expected over a period of up to 5 years. This alternative could allow you to keep your assets (auto, home, etc.), freeze interest on your debts and extend your repayment period.

In all cases, consult a trustee

In all cases, consult a trustee

Understanding the Bankruptcy and Insolvency Act is not easy and a lot of factors come into play. Before coming to a conclusion, you should consult a trustee in bankruptcy.