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lien on house being sold for amount of mortgage

I recently filed for bankruptcy . I owe Canada Revenue and they put a lien on the property before I filed. What will happen? The house is being sold for the amount of the mortgage so I will not receive any profit. Will the purchasers have to pay the lien off first ? Am I still responsible for it? I have no money to pay anything,will Revenue Canada allow it to be on the bankruptcy list? I have income from the last tax return and it is about the same amount as the lien, I know they will claim it, but I owe them more than that and they are on the bankruptcy list for the total I owe. What happens to the lien? Can I still sell the property? Please help.

One Response to “lien on house being sold for amount of mortgage”

Barton Goth GCO Bankruptcy Trustees said...

This is an important issue to discuss with your trustee. Technically speaking, the first party who is entitled to the proceeds is the mortgage holder. Canada Revenue Agency would then come next. However, despite not being official policy, in practice Canada Revenue Agency will often honor the provincial equity exemption. Whether or not you will require Canada Revenue Agency to sign off is somehting I am not in a position to tell, but your trustee will have a better idea what is commonly is requried in your area.