There are residents who seek alternative solutions to bankruptcy in Lethbridge because they believe declaring personal bankruptcy means they will lose their homes. There are two things residents like that need to know:
1. Alternative solutions to bankruptcy in Lethbridge do not guarantee you will not lose your home.
2. Not everyone who declares bankruptcy in Lethbridge will lose their home.
If you get behind in your unsecured debt repayments, creditors begin a gradually escalating process of collection activities. It begins with letters and calls and can end with lawsuits to attach your property as a means of collecting your debt.
Many Lethbridge residents who fear bankruptcy are attracted by the advertisements they see and hear from debt settlement companies that promise to cut debts in half, without bankruptcy. The debt settlement plans they offer involve getting your unsecured creditors to agree to reduce the amount you owe.
Participation in these plans is voluntary on the part of your creditors. What that means is that one or more of your creditors may not agree to the plan in the first place, or might change their minds while you are in the program. They can sue you to attach your home at any point. You have no legal protection against this with these alternative solutions to bankruptcy in Lethbridge.
Depending on what you owe and the value of your home, you could lose it. However, in most cases, the result is a lien on your home for the amount owed.
If you declare bankruptcy in Lethbridge, Alberta law sets exemption allowances for the assets you can keep and those you must surrender. Residents whose assets fall below the allowable exemptions lose nothing in a bankruptcy filing.
The personal exemption allowance for home equity in Alberta is $40,000. If your equity is less than that, you will not lose your home in bankruptcy. However, even if your equity is five to ten thousand dollars above the allowance, you might still be able to keep your home.
The fact is it costs money to sell a home and it is often in the best interests of your creditors to find a way to make up the difference. There is only one way to determine with certainty whether you are at risk of losing your home in bankruptcy. You need to schedule an appointment with a licensed bankruptcy trustee to determine your options.
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