consumer proposal and debts included

I am looking at a consumer proposal but need to find out what happens with secured debt.

Right now I own 2 homes jointly with my spouse. We rent one out and live in the other. The rental property has now been put into foreclosure, sold and there is a lawsuit against us for the remaining amount that the sale didn`t cover.

In our other house we have no equity. IF we filed a consumer proposal can the debt from the rental property be dealt included or is bankruptcy the only way to handle this?

Posted on Tuesday, February 3, 2009 | Filed under: Consumer Proposals
 posted by Questions @ 7:09 am 1 Comment
1 Expert Comment:

 At February 9, 2009 | 11:29 am , Barton Goth, Trustee in Bankruptcy Said...

A bankruptcy and a consumer proposal will both deal with the debt from the foreclosed house. While technically bankruptcies and consumer proposals cannot clear you from “secured debt” the mortgage was only secured up until the time the house was foreclosed. Once the bank has realized on it’s security (i.e. foreclosed on the house), the remaining balance is no longer secured as there are no other assets that are pledged against that loan.

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