Quite often when someone calls me in Chatham, the first question is “can I keep my house”. Unfortunately, there isn’t a yes or no answer.
The first question I ask is can you afford to keep the house? If you are 2 months in arrears, your mortgage payment is $1,100 but your income has now dropped and you are making $1,500 each month, the answer is no. It has nothing to do with whether or not you file for bankrutpcy, you don’t make enough money to pay for the house. If you don’t pay your mortgage, the bank (or other mortgagor) will take the house back.
If you can afford to keep the house, then my next question is does the house have any equity? That means if you sold the house, would you have any money left over after you paid the mortgage, penalty, real estate, legal and other fees. If the answer is yes, then bankruptcy might not be an option. A better plan might be a consumer proposal. If there is no equity and you can afford it, you can probably keep your house. But even then it is up to your lender.
Why is the answer still not definite? It depends on your lender. Many lenders are getting out of the mortgage business. Bankruptcy or not, when your mortgage is up for renewal, you won’t be able to renew it with them anyway. There are other lenders who won’t renew for customers who live in certain cities and Chatham is one of them. Before you file, we always recommend that you first call your mortgagor and find out if they are going to renew your mortgage.
As you can see, the decision on keeping your house or not is not just a bankruptcy issues. It is also a budget and lender issue. I can help you navigate through these questions. You can call me at 310-PLAN.
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