Miscellaneous 

Will I lose my house if I declare bankruptcy?

Leia Doyle

Will I lose my house if I declare bankruptcy?

You worry that you may lose your home. You can file bankruptcy even if there is equity in your home. If you owe more money to your creditors than the value of what you own you are considered insolvent. With up-to-date mortgage payments filing for bankruptcy does not mean you will automatically lose your house.

What items are exempt from being sold during liquidation bankruptcy?

Exempt property (items that a debtor may usually keep) can include:

  • Motor vehicles, up to a certain value.
  • Reasonably necessary clothing.
  • Reasonably necessary household goods and furnishings.
  • Household appliances.
  • Jewelry, up to a certain value.
  • Pensions.
  • A portion of equity in the debtor’s home.

Can I keep my financed car if I file bankruptcy?

If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments. They may also give you the option to pay off the equity at a discount in order to keep the car.

What do I lose during bankruptcy?

Bankruptcy exemptions in Alberta:

  • Enough food for you and your dependants for the next 12 months.
  • Clothing for you and/or your dependants up to $4,000.
  • Household furnishings and appliances up to $4,000.
  • One motor vehicle up to $5,000.
  • Tools of your trade up to $10,000.
  • No limit on medical and dental aids.

How much cash can I keep in Chapter 7?

There is no limit to the amount of cash you can have in your bank account to be able to file a chapter 7 bankruptcy.

What happens if my wife declares bankruptcy?

If most debts are owed only by one spouse, it may be appropriate for that spouse to file for bankruptcy alone. However, if one spouse does file for bankruptcy in order to discharge debts, the other spouse may be held responsible for repayment of some debts, such as jointly-owned credit card debt or medical debt.

Will I lose my house and car if I declare bankruptcy?

In Alberta, property exempt from seizure in bankruptcy is set out in the Civil Enforcement Act and applies to the equity in an asset. In Alberta, the exemption for a car is $5,000. In this case, you have equity of $4,000 and your unsecured creditors cannot take this from you when you file for bankruptcy.

What assets can you keep in bankruptcy?

Exemptions allow you to keep a certain amount of assets safe in bankruptcy, such as an inexpensive car, professional tools, clothing, and a retirement account. If you can exempt an asset, you don’t have to worry about the bankruptcy trustee appointed to your case taking it and selling it for your creditors’ benefit.