mortgage renewal of rental property after consumer proposal
March 24th, 2009 by Questions
I have a rental property in quebec ( we now live & own a house in toronto), last dec. my new tenant that supposed to start a year contract , changed his mind because he said, he was laid off from work and gave us a day noticed and couldnt be reach anymore. To make a story short, my rental property was vacant for 3 month and we were paying 2 mortgages for those months. We were late for bill payments only a month, but we are now living using chequing overdraft. our credit cards & credit lines are all maxed because we used more of it when we moved to a new purchase house 8 months ago. our budget will be normal again eventually since we now have a new renter but we now have a lot of debt than before.
My question is: If i or we do a consumer proposal , what will happen to my rental property which will be due for renewal 5 months from now?
Posted from: Ontario
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March 25, 2009 at 9:23 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
In a consumer proposal you won’t see any direct impact on the property as there is no vesting of your assets as there is in a bankruptcy. However, indirectly the presence of the property and a renter in the property must be considered when determining the cost of bankruptcy, what the creditors would receive during a bankruptcy and what needs to be offered during the proposal.
In terms of renewal of the mortgage on the rental property, this is difficult to determine as it is based on so many factors. As you know the lender will look at assets, debts, cash flow, current market conditions, equity in the property and payment history on the mortgage. The best place to ask this question of is the lender you mortgage is currently with.