bankruptcy and the impact on house

March 14th, 2009 by Questions

My wife and I have about 37 000 in unsecured debt , and we recently purchased a home that has lot of problems that we can`t afford to fix. Together we make about 4200 a month. We usually can make all our payments, but often borrow from lines of credit to pay bills and only make minimum payments on credit. We don`t have any equity in our home. If we were to file for bankruptcy, should we try to sell the home at fair market value before filing, or surrender the home to the bank before we file.

thks.

Posted from: Ontario

Questions

One Response to “bankruptcy and the impact on house”


, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

Either of those approaches would work, but may not be necessary. Often if there is no equity in your house a bankruptcy doesn’t have any impact on your house.

However, if you are simply finding the house to expensive each month then you can either sell prior to bankruptcy or return it to the bank. What usually makes the difference is expectation of equity in the sale process. If you don’t expect to get any equity out of the house then there really is no point to selling it, you may as well return it to the bank prior to filing the bankruptcy and if there is any shortfall it will be cleared by the bankruptcy.

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