Most residents in dire financial straits will do anything to stay out of an Edmonton bankruptcy. Some enroll in credit counseling solutions or debt settlement plans and struggle along making reduced debt repayments and then end up in bankruptcy anyway when they cannot keep up. Why are people so afraid of bankruptcy?
While it has its disadvantages, bankruptcy is a quick and effective way to get out of debt. The two principal reasons residents are so terrified of bankruptcy are credit loss and asset loss. It is not true that bankruptcy will prevent you from getting credit for the rest of your life.
However, some residents may lose assets if they file for an Edmonton bankruptcy. The Bankruptcy and Insolvency Act of Canada (BIA) tries to be fair to both parties in an Edmonton bankruptcy – the debtor and his or her creditors. The law stipulates that no one will lose everything they own in bankruptcy. It is up to the Provinces to determine what kind of assets, and the amount of each, are needed to live without undue hardship.
Alberta has some of the most generous exemption allowances of any province in Canada. Edmonton residents are entitled to a personal exemption allowance of $40,000 for equity in a principal residence.
This means if the difference between the current market value of your home and the outstanding balance on your mortgage is less than $40,000, you will not lose your home in an Edmonton bankruptcy.
If your equity exceeds the allowance by a small amount, you may still be able to keep it. How small? That is not something you can determine on your own. You need to meet with a bankruptcy trustee licensed in Alberta to get specific answers.
You will need a legal real estate appraisal to establish your home’s market value. The kind of comparative market analysis you get from a local realtor will not do. What’s more, you will need to know if your mortgage contains a bankruptcy foreclosure clause, which allows mortgage lenders to foreclose if you declare bankruptcy even if you are current with your payments.
A trustee and help you work through these issues and if your home is truly at risk, we can work with you to file a consumer proposal, which is an alternative that allows you to keep all your assets without bankruptcy.
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
