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Under pressure

I have almost $27000 of debts. i have bought my house in calgary when prices were high and due to special assesment in my condominium that will come to almost $15000 i was unable to sell my condo. I have been paying all my creidt cards regularly and also my mortgage payments. i have bought a new condo last year in the hope that i will sell the existing one and will just keep 1 mortgage. now i couldnt sell my existing condo and my new condo is ready. so i requested my bank that i am going to rent my exisiting condo but rent is $500 less than mortgage payment. bank gave me both mortgages. now my total montly payments are about $4000.
i make about $4800 a month. by the end of this year i will be almost $45000 under debt and situation is not getting better. seems like that soon i will not be able to pay everything and i have to do something about the situation. Can i file a bankcruptcy? will bank take my both homes? i also have a student line of credit in which i owe almost $14000.
what should i do?

One Response to “Under pressure”

Barton Goth GCO Bankruptcy Trustees said...

Due to the complicated nature of your situation it will be necessary for you to discuss things directly with a local trustee.

Having said that I will try to provide a few general answers. First you are eligible to file for bankrutpcy. However, for bankruptcy to be of any value you will have to voluntarily surrender at least one of the properties. This must be done before you file for bankrutpcy and then the shortfall on that loan (assuming the house is sold for less than the price you paid) will be cleared by a bankruptcy.

Second, normally the bank is not quick to forclose, so if you are up to date on the 2nd property there is a very good possibility that you will be able to retain the one and let the other go.

Third, the student line of credit, discusss this with the trustee, but most student line of credits are simply regular lines of credit that are advertised to students. If this is the case it is a debt that will be cleared. However, if this is done under the appropriate student financing legislation the 10 year rule may kick in (i.e. student financing cannot be cleared until you have been out of school for at least 10 years),

Again it is important you contact a local trustee as the issues you identified can be fairly sensitive to the practices, policies and procedures within that area of the country.