Question: 3 people jointly own a piece of property, one person has a mortgage on the property that has been co-signed by the other two parties. If the person with the mortgage goes bankrupt or files a consumer proposal how can that affect the other two people and could they lose the property or have a lien placed on it?
Answer: It depends on the value of the property. The bankruptcy trustee must turn the bankrupt’s one third interest in the property into cash, so the other two parties could conceivably buy out the bankrupt and keep the property. To start, and appraisal should be done on the property, and the mortgage balance confirmed, and from there the bankruptcy trustee can advise you on the next steps.
