Right now I think I might have to file for bankruptcy proceedings. I owe roughtly 77k. $44L os pm a line of credit, which is in default.
I have been sued by the bank, they now have a judgement.
I also have a mortgage of about 196k and the house is worth about 350k after real estate and legal fees. Can i claim bankruptcy and keep the house and wash the debts? if not, can i sell the house before the lien to a family member then claim bankrupt and wash the loans?
At May 26, 2009 |
5:54 am
, Bart Goth, Trustee in Bankruptcy Said...
In your case, the filing of a bankruptcy would not be a good idea.
The way any asset are treated when someone files for bankruptcy is based on provincial legislation. Each province can set a list of property that is considered exempt. In Alberta this is done by the Civil Enforcement Act and this legislation stipulates that you are allowed to claim as exempt up to a maximum of $40,000 equity in a principle residence. Clearly you are well above that amount. So if you filed for bankruptcy likely you would have to pay in a significant amount of money into the bankruptcy estate. From the numbers you provided, this would likely be almost equall to the level of your debt. As such the filing of a bankruptcy is not going to be a good route for you. You would be better to sell your house and use a portion of the sale proceeds to pay your debts in full.
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