If you have a mortgage and are hoping to keep your home during the bankruptcy process, you have a good chance of success. If you have been making your mortgage payments on time, the lender will probably allow you to keep your mortgage and renew it when the current term expires. Of course, you may have difficulty finding a new lender if you want to shop around for better interest rates after filing for bankruptcy.
Depending on what province or territory you live in, you may be able to keep some of the equity in your home during bankruptcy, or you may have to use all the built-up equity to repay your creditors. Figuring out how much equity can be taken out of your home is complicated because of fluctuating property values, conditions of the real estate market, and the mandatory fees and taxes involved in selling a home. An experienced trustee will be able to help you do the calculations.
Almost anyone declaring bankruptcy would prefer to stay in their home and in many cases this is possible. Sometimes, though, it may make more financial sense to let it go, especially if you live in a province that does not have a home equity exemption.
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