Assets and bankruptcy in Canada
Question: My wife and i are close to facing bankruptcy in Canada. My wife’s parents have her name listed on a property title as well as theirs strictly as a right of survivor scenario.Would this property come into play as an asset of my wife’s? If it does would there be any repercussions if her parents had her name removed before she declares bankruptcy? Thank you
Answer: The answer depends on what province she lives in, and what the property is worth. If the property is fully mortgaged, and therefore has no equity, it should not be an issue in her bankruptcy.
However, if the property does have equity, and if immediately prior to bankruptcy you transfer your share of an asset to someone else, there will be issues, since creditors don’t like it when you give up an asset just before bankruptcy.
We suggest that you assemble all of the numbers (including getting an appraisal of the property, and a print out of the current mortgage balance), and then meet with a lawyer or a bankruptcy trustee to review your options.