Negative Equity on Home

We have negative equity on our home of about $40,000. While considering either a CP or bankruptcy we are trying to get our questions answered regarding foreclosure. If we go into foreclosure after filing a CP or bankruptcy, will we be responsible for the shortfall to our mortgage holder? We would like to keep our home as we think it should regain it`s value, but it will be very tight for us during the CP or bankruptcy. We are wondering if it might be better to let the house go.

Posted from: British Columbia

One Response to “Negative Equity on Home”

A licensed trustee said...

If you decide to keep your home when you file either bankruptcy or a proposal then you will be held responsible for any shortfall if the home is “lost” later.

You should discuss this at length with your trustee BEFORE you file. From a financial standpoint, your trustee will likely tell you the best thign to do is surrender the home to the bank before you file. They won’t make you do this – it is your decision, but you can’t change your mind later without serious financial penalties…