Can You Keep Your House in Bankruptcy in Canada?

Will I Lose My House When I
File For Bankruptcy in Canada?

Owning a home is a dream for many Canadians. However, financial difficulties can sometimes make it challenging to keep up with mortgage payments and other debts. In such situations, filing for bankruptcy may seem like a viable option. But what happens to your house if you declare bankruptcy in Canada? In this article, we will explore the ins and outs of keeping your house during the bankruptcy process.


Get Your Free Consultation With a Licensed Debt Relief Expert Now!

Find out how you can quickly get out of debt by setting up a free consultation with us today.

Get out of Debt and have family bliss and happiness

Assessing Equity in Your Home

When considering whether you can keep your house in bankruptcy, the amount of equity you have in your home plays a crucial role. Equity is determined by subtracting the amount you owe on your mortgage and any unpaid property taxes from the current market value of your house. This calculation helps determine the value that could be used to repay your creditors.

Can You Keep Your House with Minimal Equity?

If you have a small amount of equity in your home and your outstanding debts significantly outweigh the equity, there is a possibility of retaining ownership of your house. However, this depends on your ability to continue making mortgage payments. In this scenario, you may be required to pay the equity amount, minus any provincial exemptions, to a Licensed Insolvency Trustee (LIT) during the bankruptcy process.

Understanding Provincial Exemptions

Each province in Canada has its own list of exemptions that protect certain assets during bankruptcy. These exemptions allow individuals to retain a portion of their equity, ensuring they can maintain their homes to some extent. It’s crucial to consult with an LIT to understand the specific exemptions applicable to your situation in your province.

Debt Relief is Within Reach!

Our government licensed debt relief professionals can help you explore options for getting out of debt.

Free and caring advice.

Get a Fresh Financial Start – Reduce Your Debt by 80%

Stop All Interest Charges & Collection Calls

You are about to be debt free!

Surrendering Your Home in Bankruptcy

In cases where you have a significant amount of equity in your home and are unable to afford the payment of non-exempt equity to the LIT, you may have to surrender your house. Surrendering your home means that it will be sold, and the proceeds will be distributed among your creditors to repay your debts.

Alternatives to Bankruptcy

While bankruptcy may be one option for debt relief, there are alternatives that can help you keep your house. One such alternative is a consumer proposal, which allows you to negotiate a repayment plan with your creditors to reduce the amount of unsecured debt you owe. It’s essential to discuss all available options with an LIT to determine the most suitable path for your financial situation.

Paying Your Mortgage During Bankruptcy

Filing for bankruptcy can eliminate or reduce your unsecured debts, making it easier to meet your financial obligations, including mortgage payments, property taxes, and utilities. During the bankruptcy process, you will attend credit counseling sessions where strategies for budgeting, debt management, and credit rebuilding will be discussed.

Seeking Professional Guidance

Navigating the complexities of bankruptcy and its impact on your house can be overwhelming. It is highly recommended to seek the guidance of a Licensed Insolvency Trustee. They have the expertise and knowledge to assess your financial situation, explain the implications of bankruptcy, and explore alternative solutions that may better suit your needs.

Discuss options to get out of debt with a trained & licensed debt relief professional.


While filing for bankruptcy in Canada may raise concerns about losing your house, the outcome depends on various factors such as the amount of equity in your home and the exemptions applicable in your province. By seeking professional advice and exploring alternatives like consumer proposals, you can make informed decisions to protect your assets and work towards a fresh financial start. Remember, each situation is unique, so it’s crucial to consult with a Licensed Insolvency Trustee to understand the best course of action for your specific circumstances.

Additional Resources:

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

I was feeling overwhelmed by my credit debt, constantly receiving calls and letters from debt collectors, which caused a great deal of stress. It seemed like there was no way out of this situation. However, I discovered Bankruptcy Canada while listening to my local talk radio station. This organization proved to be friendly, empathetic, knowledgeable, and professional, with extensive experience in their field.

During our initial meeting, they took the time to understand my debt and financial circumstances. They explained the various options available to me and helped create a personalized plan that would be most beneficial for my situation. With their assistance, I was able to avoid declaring bankruptcy by presenting a consumer proposal to my creditors. Fortunately, my proposal was accepted, and I am extremely relieved to finally be free of debt, all thanks to BankruptcyCanada. The burden on my shoulders feels significantly lighter now, and I truly believe that Bankruptcy Canada has the most skilled specialists in debt relief.