Can lien on home be removed during bankruptcy?
My wife and I co-own a home. The mortgage is higher than what we can expect to sell it for. I am in debt and will likely be proceeding with personal bankruptcy shortly. My wife’s credit it un-touched, and she will not be filing.
The house has one lien on it already.
In Ontario, can the bankruptcy proceedings remove the lien and protect the house from any current creditors that will be involved in the bankruptcy?
A bankruptcy will cause most liens to be removed once the debt is erased by the discharge from bankruptcy.
Your trustee will be able to give you a more definite answer once he examines the documents.
You can keep the home because there is no equity in the property if you can keep up the mortgage payments.
– Licensed Insolvency Trustee (LIT) for BankruptcyCanada.com