Bankruptcy & Your Home
The short answer: You can keep your home and repurchase your equity, or surrender your home and the Trustee will sell it. In a Consumer Proposal, none of your assets are affected.
To illustrate, lets assume the following:
Home Value = $400,000, owned jointly with spouse
Less: Mortgage = $360,000
Less: Selling Costs = $28,000
Net Home Equity = $12,000
50% of Net Equity = $6,000, as spouse is on title as co-owner.
Keep your home, and contribute an amount equivalent to your net home equity to your estate, which in the example above is $6,000.
Your Trustee in Bankruptcy will retain a real estate agent, sell your home, and attempt to realize your net equity in the home.
Opinion of Value
Regardless, if you are struggling with debt and own a home, it’s important to have a realistic sense of the value of your home. Most real estate agents provide free opinions of value which our Trustees will consider when assessing your situation and explaining your options
The Bottom Line
Home equity is not exempt. Therefore, if you have $6,000 in net home equity like in the example above, you can either surrender it or repurchase it. This concept applies to all non-exempt assets.