Separation and home equity

November 25th, 2008 by Questions

I live in Quebec and my common-law spouse (not applicable in QC) left me about 18 months ago. There was no legal separation agreement since it is not recognized in Quebec. Last month she filed for bankruptcy which left me to pay for any debts we jointly signed on. In order to pay these debts, I am forced to sell the house. Now, her trustee informes me that 50% of the equity will go to them as her share in the equity which she voluntarity forfeited when she left. I need help here since the closing date is less than a week away.

Posted from: Quebec

Questions

One Response to “Separation and home equity”



November 26, 2008 at 7:52 am, A licensed trustee said:

You should speak to a Family Law expert (lawyer) about your situation. Under bankruptcy law, if yuo owned the house joint and severally (together on the deed) then your ex’s trustee is correct – they are entitled to 50% of the equity upon the sale. In fact, you shouldn’t have been able to sell without the trustee’s consent.

If your name was the only one on the deed then you should be able to close the sale, but the trustee may have the funds frozen with your lawyer until the matter is sorted out.

Your best option may be to offer a proposal to your creditors (both hers and yours) to deal with the debts at the time of the sale. Talk to her trustee about this option too, it migth be the best one for you.

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