Alberta Bankruptcy

Author:

Anonymous

Question:

Back in 2007 my ex and I purchased a home, within a month we separated and agreed to turn the home into a rental due to the high penalty to the bank. My ex then purchased another home with a friend. Recently my ex's friend declared bankruptcy and left my ex holding the mortgage on that property. My ex can not afford that one on his own and is thinking of declaring backruptcy as well. I can still afford the mortgage on the house that we turned into a rental, which has no equity based on current market value vs outstanding mortgage amount. What effect would his bankruptcy have on me and the rental home as long as I keep the payments current? Is there anything I can do to protect myself and the rental home mortgage from his bankruptcy?

From:

Alger & Associates Inc.

Date:

Dec 15, 2009

Answer:

If the property has no equity then a trustee would perform a valuation and if they came to the same conclusion you could continue to make payments and maintain the property. If there was equity in the rental then generally what would happen is you would make an offer to the Trustee for your ex's share of the ownership.

Karen Rideout
phone: (403) 296-2973
krideout@alger.ca