Rental Property and a residence
My wife and I have personal loans and debts we cannot service. I lost my job and her business is failing. We are contemplating bankruptcy or a consumer proposal. We jointly own a residential rental property as well as our own residence. We have a mortgage on the rental property that is higher than the value we could sell it for. The rent we are receiving does NOT cover our expenses including the mortgage. We would like to walk away from this rental property, allowing the mortgage company to seize it. The same mortgage company holds the mortgage on our residence as well. We have about $45K in equity on our residence. Can we keep our residence and walk away from the rental? Could the mortgage company force us out of our residence? Will they prevent us from doing a consumer proposal?
Posted from: Ontario
As long as the both properties have separate mortgage’s on them you shouldn’t have any trouble walking away from the rental property and keeping your residence. Of course you would have the shortfall from the rental property you would have to deal with and this may mean a bankruptcy or a consumer proposal. At this point I would suggest you contact a local trustee and review these options prior to sending the property back. That way you can develop a plan to ensure things happen the way you expect.