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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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Is it possible to lose your house because of pre bankruptcy settlement?

I have 60k debt on my credit card with a bank. We went to court and made a settlement on my payment for $350 per month and I gave bank the authority to sell my home if I do not pay that monthly payment (My home has equity like 30k). Now I have calculated and found if I claim bankruptcy I should pay 200 per month to trustee and also all my debts which are equal to 90k (including that 60k) will be gone. I want to know if I claim bankruptcy and stop paying the $350 to bank and start paying $200 to trustee, can they still sell my house because of that court permission or bankruptcy law will protect my home from it.

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Posted from: British Columbia

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One Response to “Is it possible to lose your house because of pre bankruptcy settlement?”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

From the sounds of it you may have used your house as security as part of this settlement. This is unusual, but definitely possible. If you gave the bank security this exists even if a bankruptcy is filed, then the bank will retain the right to sell the property.

Realistically this all comes down to how this arrangement has been set up. I would recommend you bring all the documents related to this settlement with you when you meet with a local trustee and they will be able to advise you as to the specific consequences you can expect.