When facing a foreclosure, some will advise proceeding with filing for bankruptcy. However, you need to know that simply filing for bankruptcy will not stop nor remedy a foreclosure in Canada. This is because personal bankruptcy in Canada does not involve nor include secured debts such as mortgages.
Mortgages are considered secured debt because there is an asset being used to secure the loan. In this case, your home or property is used as collateral to secure the loan. When you go into default, thus creating a foreclosure, your mortgage lender is attempting to recoup the amount owed to them. Furthermore, depending on the type of mortgage, the outcome of the sale of the home, and your own particular situation, you may be required to pay any difference owed to the lender if the home sells for less than the amount owed.
While a bankruptcy works to eliminate unsecured debt such as credit card and consumer debts, your home will not be included, and filing for bankruptcy will not stop a foreclosure from proceeding. You may find through your online research that it is possible to stop a foreclosure through bankruptcy in other countries such as the United States, however, be advised that the same does not apply to Canadian regulations.
If you are having trouble paying your mortgage and are worried that you may be facing foreclosure, please get in touch with us right away. We can help guide you through the options available to you and help you save your home.
