Mortgage-poor, property won’t sell, want to retire…
We own two properties; one almost fully mortgaged, but would be really hard to sell. The other, half mortgaged, but including our lines of credit, you could say fully mortgaged… also really hard to sell. We know they would be hard to sell because similar properties in similar areas have been sitting on the market for months. I plan to retire next year because my profession is too exhausting to carry on past the age of 58. If we do a Proposal, could the bank seize the property we don’t live in and leave us the other one?
Posted from: New Brunswick
You have the right to surrender or not surrender any security to a creditor when you file a proposal and the residual debt, if any, becomes an unsecured debt that may be dealt with by your proposal.
So – you can decide to surrender one property to the bank and keep the other one – you will have to maintain the mortgage payments on the property you decide to keep. Keep in mind that a proposal is an offer to repay part of what you owe – you are going to have to estimate how much the bank will still be owed for the property you are surrendering – in other words, it will affect how much you owe and how much you have to offer to repay.
Your trustee will explain all of this in greater detail BEFORE you file.