Some people who own their own home can’t or don’t want to keep it. Common reasons why someone might not want to keep their home are:

Can’t afford the payments

The house value is far less than the mortgage balance owed

Marital/relationship breakdown

The biggest challenge facing a homeowner who wants to surrender their home is finding a new place to live. In most cases this involved getting approved by a landlord and having the money to cover first and last months rent, and moving expenses. More information on finding a place to rent after making a consumer proposal or filing personal bankruptcy.

We recommend the following to people who want to surrender their home:

Stop making mortgage payments – once you stop making mortgage payments your mortgage company will eventually initiate power of sale or foreclosure proceedings.

Wait for the bank to force you out – power of sale or foreclosure is a process which takes time during which you can live in your home mortgage and rent free.

Save your money – you should save the money that you are not paying to your mortgage company to be used for first and last month rent as well as moving expenses.

Maintain your insurance – as long as you are living in your home you should maintain your insurance to protect your belongings and avoid any other liabilities which may arise.

Residual balance or shortfall – after the bank has sold the property, any residual balance or shortfall left owing (assuming the sale proceeds were less than the total amount owing) can be discharged by making a consumer proposal or filing personal bankruptcy.

In most cases, people will file their consumer proposal or bankruptcy around the same time they stop making their mortgage payments. It is not necessary to wait until the mortgage company has taken possession of the property or the house has been sold to take action.

My best advice would be to contact our office to arrange a FREE consultation with one of our licensed trustees to review your situation and discuss options.

We have offices across South Western Ontario plus flexible hours to meet your needs so you don’t have to miss work. Let us help you get a fresh financial start!

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