What would happen to the house if the mortgage is not paid?
March 11th, 2015 by Questions
Common-law relationship of 5 years and the relationship has ended. There is a mortgage in both names with no equity and there is a truck loan of 13,000.00 in only one of the names (spouse-1). One of the common-law spouses (spouse-2) refuses to get a lawyer, sign any kind of agreement or sell the property. Can spouse-1 claim bankruptcy? What would happen to the house if the mortgage is not paid?
Posted from: Alberta
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March 11, 2015 at 8:42 am, Desmond West-Chow, CIRP said:
Spouse-1 can certainly file a bankruptcy. If they did file, they would need to remain current on both the mortgage and the truck loan in order to be entitled to keep both the truck and the home. If either one is not paid, the creditors that hold the loan and mortgage, respectively, have the legal right to repossess or foreclose on the truck or mortgage. If these assets are taken by the banks before the bankruptcy is filed (or the decision is made to return them to the banks) then a bankruptcy could deal with any shortfall that may occur. Shortfall is any amount left owing to the bank on the loan, once the creditor has sold the property and applied the sale proceeds to the loan.