What happens with my house in bankruptcy? Can I keep it? - If you are up to date on your mortgage payments and there is little or no equity in your home, you should be able to keep your house in bankruptcy as long as the required mortgage payments are made.
If you have fallen behind on the payments, the mortgage holder will likely start foreclosure proceedings after three months of missed payments. Once the court foreclosure proceedings have begun, you are then at risk of being forced to leave your home.
If you are up to date on your mortgage, but there is equity in your home above the allowable exemption amount, you will need to make an arrangement with your bankruptcy trustee to "buy back" the equity by making payments into your estate prior to your discharge from bankruptcy.
The allowable exemption amount is $12,000 if you are living in the Capital Regional District or the Greater Vancouver Regional District. It is $9,000 elsewhere in B.C. Also, you must actually be residing in the home in order for exemption to apply.
If the amount of equity is too great and a "buy back" from the trustee is not possible, keeping the house might not be an option as bankruptcy trustee may be required to sell the home. In this case, the length of time you can continue to reside in the home can vary depending on the individual circumstances involved. However, it can usually be resolved through a mutual agreement between you and your trustee.
If you have questions regarding keeping your house in bankruptcy, please feel free to contact our British Columbia bankruptcy trustee office for a no-charge consultation. We will be glad to answer your questions, explain your options, and recommend the solution that would work best for you. If, instead, you choose to send us your questions online in a request for a Free Case Evaluation we will provide you with our feedback in the following 24 hours.