joint ownership

January 17th, 2011 by Questions


August 31, 2009, my mother filed for bankruptcy and she has not been discharged. However, my mother and I own a house (she lives in it) and have a mortgage on it (so, both our names are on the ownership and we both signed the mortgage). Since she lost her job (the original reason for her bankruptcy) and has been unable to find a new one, she will soon be unable to pay the mortgage on the house.

What will happen if she can’t pay the mortgage (will the bank require me to pay the mortgage or will the house become part of the bankruptcy assets)? We live in Ontario.

Thank you.

Posted from: Ontario


One Response to “joint ownership”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

If your mother is unable to pay the mortgage and the bank is forced to foreclose then there will be a shortfall that both you and her are personally liable for.

Now if this forclosure happens after she has filed bankruptcy that may mean she cannot be cleared from this shortfall as the default happend after the filing of the bankruptcy. But that is going to be a timing issue she needs to discuss with her trustee.

As for you, regardless of whether your mother is cleared from that debt, because you are listed on the mortgage you are jointly and severally liable for this debt. Which means that regardless of what happens to your mother you are legally responsible to pay the debt in full. This holds true even if she files for bankruptcy. Your mothers bankruptcy cannot protect you from a debt you signed on.

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