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Mortgage forclosure during consumer proposal

I was wondering, I have a house with a value of 100000 and a mortgage of 145000. If I file a consumer proposal for my unsucured debt (credit cards) and it is acceptedand then the bank forcloses onmy mortgage after the acceptance, what happens with the shortfall after the sale. Is it considered unsucured debt and put into the consumer proposal or is it considered new unsecured debt that I am responsible for?

Posted from: Ontario

One Response to “Mortgage forclosure during consumer proposal”

A licensed trustee said...

If you are going to walk away from your home (or you think the mortgage comapny is going to take it away from you) you need to do so BEFORE you file your consumer proposal. If you continue to make mortgage payments (even 1 payment) after you file your proposal and then lose the house you may be held responsible for any shortfall. In other words, you can’t add this debt to your proposal…

So BEFORE you file think long and hard about the house. If you think you will lose it then your best course of action is to either wait and file after you lose it or decide for yourself to move out before you file. This is somehting you want to discuss in detail with a trustee before you make any decisions.