When debts become unsustainable, many people wonder if bankruptcy can be a viable solution. But what about your home mortgage? This topic is particularly sensitive as it concerns one of your most precious assets: your home.
In this article, Poupart Syndic explains how bankruptcy affects a mortgage and what options are available in Canada.
Bankruptcy and home mortgage: what you need to know
Bankruptcy can help eliminate several types of debts, but it doesn’t automatically mean you’ll lose your home. Several factors come into play.
Does bankruptcy directly affect your mortgage?
Unlike other debts, a mortgage is secured by your property. This means if you stop making payments, the lender can exercise foreclosure rights. However, if you continue making your monthly payments, bankruptcy won’t directly affect your home mortgage.
Can you keep your home after bankruptcy?
In some cases, it’s possible to keep your home after bankruptcy if:
- The home’s net value is low.
- You can continue making your payments.
- You reach an agreement with your trustee to keep your property.
If your home has significant net value, your trustee might be required to sell it to repay your creditors.
The impact of mortgage calculation on your financial situation
Making a mortgage calculation before making a decision is essential to understand bankruptcy’s impact on your ability to keep your home.
How to calculate mortgage in case of financial difficulties?
If you’re in difficulty, it’s recommended to calculate mortgage considering:
- The remaining balance to pay.
- Your home’s market value.
- Your ability to cover monthly payments after bankruptcy.
Alternative options to bankruptcy
Before declaring bankruptcy, it’s essential to explore all available options. Based on our experience at Poupart Syndic, we often recommend the consumer proposal, which allows debt reduction while preserving the home. This negotiable solution with creditors can offer financial relief without bankruptcy’s drastic impact.
Another alternative is consolidating multiple debts, which simplifies repayment by grouping several debts into a single monthly payment, making budget management easier.
Finally, renegotiating your mortgage with your financial institution can offer more favorable conditions, such as lower interest rates or extended loan terms, helping to better control your finances.
How can Poupart Syndic help you?
If you’re worried about losing your home, Poupart Syndic can guide you to find the best solution based on your situation.
Personalized support
Our insolvency experts will analyze your situation and propose the best options to minimize bankruptcy’s impact on your home mortgage.
Make the right decision with Poupart Syndic
Declaring bankruptcy doesn’t automatically mean losing your home, but it’s essential to understand your options well. If you’re facing financial difficulties and don’t know what to do with your mortgage, contact Poupart Syndic today for a free consultation and solutions adapted to your situation.
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