How will bankruptcy work on a foreclosed (2nd) mortgage?
September 18th, 2012 by Questions
I have a mortgage on a house with very little equity and would like to keep that house and continue to make the mortgage payments. I had another house that I was unable to make the payments on and has since been foreclosed. The house and property were sold but for approx. $40,000 less than what was owing on the mortgage. Will bankruptcy cover that foreclosed mortgage while still allowing me to keep my other mortgage?
Posted from: Nova Scotia
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September 18, 2012 at 5:57 pm, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
The house that is foreclosed won’t be an issue. In a bankruptcy this shortfall is simply an unsecured debt an you will be cleared from it as part of the bankruptcy.
However, depending on how much equity you have in your residence, you may run into a bit of an issue as in Nova Scotia you are not permitted to have any equity in the property. So you will have to contact a local trustee and they will discuss with you how much equity and the different options that exist to deal with that.