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Shortfall

I had to file a consumer proposal in February. The house or property taxes is not mentioned in the proposal as I kept living there while my ex-husband made the mortgage payments in lieu of support. He wanted me out of that house so he filed for bankruptcy in June so I was forced to surrender the house to the bank (we are bought on the mortgage).

I never made a single mortgage payment and can prove that he made them in lieu of support as he kept making payments after my proposal until June.

Since I’m in a proposal, will the shortfall on the house and property taxes be covered under my proposal since the mortgage and taxes were a pre-existing debt?

Posted from: Ontario

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One Response to “Shortfall”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

You really need to discuss this with your trustee. But the short answer is no, the mortgage and the property taxes won’t be covered under your proposal because the default on the mortgage didn’t occur until after you filed the proposal and the proposal didn’t provide for either of these amounts.

Now you may be able to amend the proposal to include these revised list of debts, but that will require larger payments, and re-voting on the new terms in the proposal. If that isn’t an option you may be forced to consider the bankruptcy route, of course this depends on the amount of the shortfall from the property, but that is something you can discuss with your trustee.