If you want to file for bankruptcy, one of the biggest worries you face has everything to do with the loss of assets, especially your home. With personal bankruptcy in Toronto, you don’t ‘lose everything’ as the Ontario law allows you to keep things like cars, tools, clothing, and furniture.
As is with every bankruptcy filing, the loanee has to surrender some belongings in order to pay back the debt owed. Nevertheless, here are items that you can keep:
- Clothing: In 2015, the law changed to allow debtors to keep all their clothing after a successful bankruptcy suit.
- Food, furniture, and utensils: In these categories, there is a limit of $13,150, which is the total amount that you can retain.
- Tools of trade: With a limit of up to $11,300, you can keep your job tools.
- Automobiles: If your car is worth $6,600 or less, you will not lose it. An expert can appraise it for you if you want to know it’s real worth.
- Machinery and farm livestock: There is a limit of $29,100 for those who own farms. If you file for bankruptcy, your farm and any other farm-related assets have protection up to this limit.
For many people, their home is the most important asset. A home is a source of joy, many memories, and comes with a lot of emotional attachment so losing it is usually one of the biggest concerns for anyone. Luckily, undertaking a bankruptcy process does not mean you automatically lose the house. Keeping your home after bankruptcy filing largely depends on its equity.
Equity means your home’s market worth subtracted by all liens relating to the property. Another name for home equity is real property value. For you to have high property equity, you should have made significant repayments on the mortgage. This home equity is what the courts use to decide if you keep your home after filing for bankruptcy. If you need help determining your equity, visit York Credit where we will assist you comprehensively.
In December 2015, legislators introduced a law allowing bankrupt individuals to retain their homes, with a limit of up to $10,000. In the years before, this was not the case as homeowners had no exemptions once declared bankrupt.
To illustrate, the current law dictates that if, for example, you have a home worth $150,000 while your mortgage debt is $130,000 and your property taxes total $600, the equity is $19,400 ($150,000-$130,000-$600). For you to keep your home after the bankruptcy process in such a situation, you have to pay your Trustee $9,400.
It is advisable to avoid filing for bankruptcy as a debt relief method when you have a high home equity. Consider other options such as consumer proposals which will not risk the assets that you have. At York Credit, our debt experts will help you realize all other options that will enable you to avert bankruptcy.
If you have any query relating to bankruptcy, visit our web page to review bankruptcy FAQ and get the answers. Moreover, we have debt professionals on call if you require further assistance. Contact York Credit today.