recreational property and bankruptcy

Hello, I find my self in a perdiciment.

I have a significant assets, but the problem is they are tied up and even if I could get at them they may not be sufficient to cover all of my indebtedness.

I suppose this partially depends on how the assets are sold, and more importantly what is going on in the overall economy.

As a result I am looking at filing a bankruptcy. Now I have no problem turning over most of my assets to the trustee for disposition, but I do have one asset that troubles me. I have a vacant waterfront property where I plan to build a cottage on. This would be my only property as I currently rent. The property has some equity, but I do believe it would be below the provinces allowable amount. Is there any possible way for me to retain this property in bankruptcy?

What would happen if I sold it to a relative who would make payments on id during my bankruptcy and then I could buy it back from them at some later date? Would cause problems with my bankruptcy?

Posted on Tuesday, September 22, 2009 | Filed under: Bankruptcy
 posted by Questions @ 12:48 pm 1 Comment
1 Expert Comment:

 At October 2, 2009 | 1:38 pm , Bart Goth, Trustee in Bankruptcy Said...

In Alberta you are allowed to have up to $40,000 of equity in your principle residence. Now if you are living in the property you would qualify for this, and as long as you can continue to make payments to any mortgages or loans that are attached to this property there there really won’t be any issue, nor any need to sell it to a relative or any of those types of things. Although you will find if you are involved in creatively trying to change ownership status of any property this will cause you significant difficulties in bankruptcy and will likely result in the transaction being reversed and you no longer being eligible for an automatic discharge, so it is best to not do anything like that. Especially when the property sounds like it is not at risk!

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