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Foreclosure on home

I am in pretty serious financial debt with a $500,000 mortgage, a $50,000 bank loan for a car, back taxes, $35,000 in student loans and about $70,000 in debt. My ex husband was smart and put all the debt in my name and has left and I make very little for income. I have not paid the bank in 2 months and they have told me that they are sending me a `demand to pay letter` and then have advised me that their lawyer will contact me to negotiate when I have to leave my home. My home has no equity in it and the bank wants more than I can get for it. The house is up for sale but I have had no offers on it. I am contemplating on going bankrupt, a very tough decision for me since my credit has always been perfect. My questions are: Is it better to declare bankruptcy prior to the foreclosure process, or does it make a difference? Also, how long should I be able to negotiate with the banks lawyer for my son and I to be able to stay in the home? Also, if I go bankrupt, will the amount that I owe to CMHC and the Mortgage Company be included in the bankruptcy?

Posted from: British Columbia
Company be included in the bankruptcy?

Posted from: British Columbia

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One Response to “Foreclosure on home”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

First of all timing is important, it would be best if you filed for bankruptcy after the foreclosure has started. If you sign the bankruptcy documents after the foreclosure then it will clear you from the CMHC Debt as well as any amount owing to the mortgae company.

As for how long you will be able to negotiate to stay in the house, this really depends on how aggressive the lawyer is and your ability to negotiate, but I wouldn’t plan on being able to stay for very long.

At this point I would recommend you first start to look for somewhere else to live, and second you really need to sit down with a local trustee to discuss how the bankruptcy will progress.