MORTGAGE RENEWAL
HI I was told by a trustee that it would be better to renew my mortgage if I did bankruptcy rather then a cp.
As soon as I said our mortgage is with Scotia bank they said that this bank would never renew. If we do a cp we would be 2 years and 4 months into the cp when we need to renew. Our credit is r1 now because we borrow from one to pay other.
There is no equity in home and our debt is 120000.00 Should we do bankruptcy if its better to renew mortgage in 2014 as we would be discharged by then. Can they take money from life insurance if someone dies and leaves money. Hope you can help
Posted from: Ontario
I am not sure I agree with the advice you have been given.
Firstly, it is very easy to renew a mortgage regardless of your income, debt, the presence of a bankruptcy or a proposal. Most mortgage renewals don’t require a credit check or anything special, they simply rely on the relationship you have with them and the track record you have developed with them by making regular mortgage payments.
Second, in 2014 you will be discharged, but your credit will be listed at an R9 which is the lowest credit rating you can have. So if the bank were to do a credit check it may look worse than if you were still in the middle of the proposal.
So from my perspective I would suggest the proposal would seem to make sense as it allows you to avoid a bankruptcy and shouldn’t cause you any problems when it comes to renewing your existing mortgage.