What route should I take?

February 6th, 2011 by Questions

It will be two years this coming July that my husband & I claimed bankruptcy. We kept our home. Our mortgage is higher than what the property value is. My husband and I are now separating and I am wondering what I should do now. I can\’t pay rent and a mortgage. When the house sells what happens with the difference that we owe? What happens if we don\’t sell and place the house into foreclosure? Thank you. I didn\’t know who would be the best non-biased person to talk to about my concerns.

Posted from: Ontario


One Response to “What route should I take?”

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

As I am sure you can appreciate to advise on the best approach more details would be required, so you may have to sit down with a local trustee to do this.

However, I can help you with the second quetion. If you sell the house for less than it is worth (i.e. in a forclosure), the proceeds from the sale are used to cover the costs of the sale, then reduce the amount owing on the mortgage and anything left you are responsible for. This shortfal may be to the bank (in non-CMHCured mortgages), if not then CMHC will cover any losses incured by the bank and you will owe this shortfall to CMHC. At this point is likely when you will need to determine what the best approach is as the presence of any shortfall will have a significant impact on the available options.

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