I Am In Debt, But I Own A House. Can I Go Bankrupt? 

Going Bankrupt When You Own a Home

If you’re in debt but you own a house, one of the first questions you might ask a Licensed Insolvency Trustee or other financial professional is if you can go bankrupt.

The short answer is yes.

There are cases in which your debt can cause you to go bankrupt, even if you own a house.

But, that doesn’t automatically mean you’ll have to lose your house.

More importantly, you should ask yourself whether you should keep your house, and then look at your other options for getting out of debt.

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Hanging Onto Your House

As of 2017, the homeownership rate in Canada was over 67%.

But, nearly half of Canadians admit that they’re struggling to cover the cost of living.

Obviously, there is some overlap between those two numbers.

That doesn’t mean that every homeowner in debt gives up their house or files for bankruptcy.

Each situation is different.

Some of the factors that will come into play include:



By focusing on some of these factors, you can have a better idea of whether bankruptcy is even the right option for you, or if you should consider other debt-relief alternatives.

How to Get Out of Debt and Keep Your House

If you’re willing to sell your house or you don’t want to live there anymore, the profits made from your sale can be used to pay off your creditors so you have a clean slate and can start over.

But, that isn’t always feasible for everyone.

Another option outside of bankruptcy is to file a Consumer Proposal.

This can only be done through a Licensed Insolvency Trustee, but it allows you to negotiate with your creditors and set a fixed amount to pay back over a period of five years.

When that amount is agreed to, your creditors cannot come after you or threaten to take your house or other assets.

Yes, as long as you continue to make mortgage payments, your house will be fully protected in a Consumer Proposal.

What you should really ask yourself is if you can afford your house.

It can be a harsh reality for some people to come to terms with, especially if you’re attached to your home.

But, if it’s causing you financial issues and you can’t keep up with the payments, selling it and moving into a smaller home might be your best option.

If you’re struggling with debt and you’re worried about keeping your house, feel free to contact one of our Licensed Insolvency Trustees at Bankruptcy Canada.

Together, we’ll work through the ins and outs of your financial situation and come up with the best possible options for getting you out of debt as a homeowner.

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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