When you’re considering bankruptcy to solve your debt problems, one of your biggest concerns might be whether you will lose some of your assets, especially your house. We understand that this is an unsettling thought; you might have heard somewhere that you’ll ‘lose everything’ if you file for bankruptcy. Fortunately, this is not the case, but there are some rules you will need to know.
In British Columbia, bankruptcy law has exemptions to allow you to retain assets such as clothing, tools, cars and furniture. While you may have to part with some of your assets in order to pay back some of your debt to your creditors, your assets are protected up to a certain amount. Find out more about bankruptcy exemptions in British Columbia.
These exemption amounts were current as of December 1, 2015, but our debt experts can advise you if there are any other recent updates and will be able to answer any questions about what you can keep during the bankruptcy process.
We understand that for many homeowners, their house is their greatest asset and the source of many memories. Not only is it possibly the most valuable, in terms of dollars, but the emotional attachment you have to your home is priceless. The good news is that you don’t automatically lose your home during the bankruptcy process. However, there are some important factors to consider. First, we’ll help you figure out how much equity you have in your home. Then, depending on how much equity you do, or do not have, we will be able to advise you what impact a bankruptcy would have on your ability to stay in your home.
It matters because the amount of equity you have in your home will determine whether you will be able to keep your home. What is home equity? Home equity is your share of the value of your home—what your home is worth on the market minus what you owe on it. We can help you determine the market value of your home (we’ll look at real estate listings for homes similar to yours), then subtract the amount you still owe on your mortgage, as well as any property taxes you owe.
Bankruptcy might not be the best debt solution for people who have paid off a good chunk of their mortgage and have a lot of home equity. You might want to consider other debt relief options, such as a consumer proposal, instead. This is why our debt experts will discuss every one of these with you before looking at a bankruptcy.
We hope that this page helped to answer two of the biggest questions about bankruptcy. There are a great many myths about bankruptcy, so we want to help you get the facts and see how a bankruptcy would impact your family—if it is even needed in your situation. If you have any more questions, you may review our Bankruptcy FAQ page or request a call to speak with a debt help professional.