Home Equity-Rights of Spouse in a Bankruptcy
January 30th, 2016 by Questions
We live in Alberta and have accumulated $140K in debt. My husband owns a small business that is struggling and has been for the past year. It is a sole proprietorship. We “own” a home in which the value is $440K, but the outstanding mortgage and secure line of credit are $310K. We spoke with a debt consolidation person about our circumstances and were told bankruptcy is our only option, but that we would keep our house. The debt is all in my husband’s name due to the business, and only he would be filing bankruptcy. The non-exempt home equity was calculated at just under $15K, but I don’t see how this is possible. I don’t understand how this is calculated. It gives us hope for keeping our home, but I am worried the figure is wrong, how can I determine this? It is my understanding that the free allowance for my husband’s portion of the equity is $20K based on the $40K home exemption allowance in Alberta, so this doesn’t seem to add up. Do I have rights for keeping our home because I am not filing bankruptcy?