Proposal possible Complications
March 15th, 2009 by Questions
a)Im about to go into proposal and I have a rental property. Its worth 90 000$. I have owing 80 000$ on the property. Will my creditors have access to the 10 grand of equity?
b)and my main home is worth about 440 000$ I owe 520 000$ on it. So negative 80 grand equity. Can I just walk away from it and calll it a day or will I have to pay that back?
c)If I stop paying for the mortgage will the bank throw me to the streets? How long does it take to get foreclosed Will they warn me or just show up with no warning?
Posted from: Ontario
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March 16, 2009 at 8:44 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
Firstly, the equity and the income you receive from the rental property won’t be directly impacted, but they will have to be valued and then you will have to offer a greater recovery to your creditors than they would receive in a bankruptcy.
Second, your main home. You can walk away from it, but you will still be responsbile for the shortfall on the mortgage once the house is sold and the proceeds are applied to the mortgage. However, if you file a consumer proposal or a bankruptcy and the house is foreclosed upon prior to filing, then the shortfall will be cleared by these processes.
As for the amount of time it takes for a foreclosure to happen, this varies in every situation. However, the bank does need to give you notice in advance that it is taking place.