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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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What happens to the house?

Our house is in my husbands name and my sisters name. She is considering bankruptcy. What will happen to the house in this case? Could we loose it because of her bankruptcy?

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2 Responses to “What happens to the house?”

A licensed trustee said...

Good question. If there is no equity in the house, the second spouse is generally not affected either.

If there is equity in the house, it may be necessary for the non-bankrupt spouse to “purchase” the bankrupt spouse’s interest in the house back from the trustee.

The rules are different in each province, so where houses are involved in a bankruptcy, the advice of a licensed bankruptcy trustee is essential before you make a decision on whether or not bankruptcy is right for you.

Barton Goth, GCO Inc. Bankruptcy Trustees said...

This is a question you need to direct to a licensed trustee in your area as it depends on a number of things (i.e. whether or not she is living in the house or not, what province you are in, and the amount of equity in the house). Make sure you have this information available and they will be able to detail how this situation should be handled in your province.

As to whether or not it is possible you would loose the house. This would only happen if there is substantial equity in the home and you are not able to purchase her non-exempt equity from the bankruptcy estate by taking a 2nd mortgage or equity take-out.