Foreclosure or Bankruptcy
October 4th, 2012 by Questions
We currently have a mortgage on our house and want to be done with it. I live in Sask and it is a refinanced mortgage through CMHC with 0 equity. This is the main debt I want to get rid of. Don’t want to keep the house. Would foreclosure (can they come back at us and sue us?) or bankruptcy (can we claim bankruptcy to get out of our mortgage?) be our best option?
Posted from: Saskatchewan
One Response to “Foreclosure or Bankruptcy”
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October 04, 2012 at 9:56 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
What you would have to do is first let the house go into foreclosure, then you would need to file a bankruptcy. The foreclosure deals with the house, but once the house is sold there will be a shortfall due to the legal fees, the penalties and the real estate fees. The bankruptcy is filed to clear you from this shortfall.
Timing is important, you need the default of the mortgage to happen first (note, the foreclosure doesn’t have to be completed, it simply needs to have started). Then you can file the bankruptcy.