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Alger Bankruptcy Services

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In 2003 I bought a house with my sibling (we both entered into the mortgage in our 20s). We both signed the mortgage, and every 5 years we re-negotiate. My sibling might be able to afford the mortgage on their own, but I heard that if you try to sell the house within 5 years prior to filing for bankruptcy, the creditors could overturn the sale. Is there any way to insulate my sibling from this? We donât have mortgage insurance, and I doubt I would be able to get the insurance given the large amount I owe in income tax. Is there another way? Some of the items in the house are owned by my sibling, some are mine, and some are jointly owned or were joint gifts. Because of the complexity of the ownership of the assets in the home, if I declare bankruptcy myself, would my sibling have to produce receipts and prove ownership for all the assets they own? If they could not produce the receipts, even though I don't have any documentation to say they are mine, would those assets be considered mine and be included in the asset seizure?



Alger & Associates Inc.



Feb 07, 2013



If a bankrupt sells an asset to a related party (ie a sibling or siblings) prior to bankruptcy, the Trustee will review the transaction to ensure that fair market value was obtained by the bankrupt. Generally in these circumstances the Trustee would require that the puchasers to pay to the Trustee the difference between fair market value and the funds received by the bankrupt. If an agreement cannot be reached, the Trustee could apply to the Court to overturn the transaction. If the ownership of an asset was in question, evidence of ownership may be requested by the Trustee. In Alberta, certain assets are exempt from the bankruptcy process including up to $40,000 of equity in a residence. Please see our website at for a full list of exemptions or call me at 403-296-3082. If you have a large tax debt, I recommend you consult with a Trustee as soon as possible and before CRA commences enforcement action. Thanks for the question.

Marie Kozlowski
T 403-296-3082


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