Selling Your House During a Consumer Proposal or Bankruptcy in Alberta

Updated September 2026. General information, not legal or financial advice.

Short answer: in a consumer proposal you normally keep your home and can sell it, as long as you follow your proposal's terms and keep paying the mortgage. In bankruptcy your property vests in the Licensed Insolvency Trustee, so the trustee controls any sale. Alberta protects up to $40,000 of equity in your principal residence. Talk to your trustee before you list.

Consumer Proposal vs Bankruptcy: What Happens to the House

Insolvency in Canada is federal. The Bankruptcy and Insolvency Act sets the rules everywhere, and the Office of the Superintendent of Bankruptcy (OSB) oversees the Licensed Insolvency Trustees who run every file. What Alberta adds is the list of assets you get to keep, including part of your home equity.

Albertans use these tools a lot. In the second quarter of 2026, Alberta recorded 5,031 insolvencies: 4,168 proposals and 863 bankruptcies, according to the OSB. Over the 12 months to June 30, 2026, the province had 19,340.

Selling Your House During a Consumer Proposal

A consumer proposal is a deal with your unsecured creditors: you pay back part of what you owe over up to five years, and they stop collecting. Your mortgage is separate. As long as you keep paying it, the OSB says you keep your assets, including your home.

That also means the house stays yours to sell. The catch is your proposal document. Some proposals include terms about what happens if you sell a major asset or receive a lump sum, and your trustee needs to know before you list. A call first costs you nothing and avoids a default that could collapse the proposal.

Why sell at all during a proposal? The usual reasons are practical: the mortgage payment no longer fits, the family is moving for work, or a separation means one household becomes two. If you have equity, some people also use a sale to finish the proposal early. Ask your trustee whether that option exists in your case.

Selling Your House During Bankruptcy

Bankruptcy works differently. Under section 71 of the Bankruptcy and Insolvency Act, your property vests in the trustee the moment you go bankrupt. You still live in the house, but you are no longer the one who decides whether or how it sells.

What the trustee does depends on your equity. Under section 67 of the Act, provincial exemptions apply, and Alberta's Civil Enforcement Regulation protects up to $40,000 of equity in your principal residence. If your equity is under that, the trustee usually has nothing to sell. If it is over, the trustee wants the excess for your creditors, either by selling the home or by agreeing with you on a way to pay out that amount.

Your mortgage does not go away. Section 69.3(2) of the Act means the bankruptcy stay does not stop a secured creditor, so your lender can still enforce the mortgage if payments stop. If that is where things are heading, read how foreclosure works in Alberta.

Clay figure reviewing documents at a desk with a laptop

A Worked Example on an Edmonton Home

Here is a simplified illustration on Edmonton's August 2026 median residential sale price of $467,750, with $380,000 left on the mortgage. Your trustee does the real calculation, and it can differ.

In a bankruptcy, that roughly $27,800 is what the trustee would look to recover for creditors. In a consumer proposal, the equity still matters: creditors vote on your offer, and your trustee will ask about home equity at the first meeting.

Selling Before You File

Some homeowners sell first to clear debt and avoid filing at all. That can work when the equity covers what you owe. Run the numbers with a trustee before you decide, because the order of events affects what you keep.

If you do sell, the choice is the same as for any seller: list on the open market for the highest price, or take a cash offer for speed and certainty. With homm.ca, you start with an instant online estimate. A partner REALTOR® then looks at the house in person to assess improvements and anything the estimate missed. Once a partner REALTOR® has seen the home, a guaranteed cash offer can be ready in as little as 24 to 48 hours. There is no fixed percentage; the offer is based on the assessed value. If the home later sells for more than fair market value, the profit is split 50/50 with you. See the Edmonton and Calgary pages, or compare the routes in cash offer vs listing in Alberta. If the home is rented out, read selling a tenant-occupied home in Alberta first.

Frequently Asked Questions

Can I sell my house while in a consumer proposal in Alberta?

Usually yes. A consumer proposal lets you keep your assets, including your home, as long as you keep paying the mortgage, so the house remains yours to sell. Check your proposal's terms and tell your Licensed Insolvency Trustee before you list, because some proposals include conditions about selling major assets.

Do I lose my house if I file for bankruptcy in Alberta?

Not necessarily. Your property vests in the trustee, but Alberta protects up to $40,000 of equity in your principal residence. If your equity is below that and you keep paying the mortgage, you may keep the home. If it is higher, the trustee will want the excess for creditors.

Does a consumer proposal include my mortgage?

No. The $250,000 consumer proposal limit excludes debts secured by your principal residence, and the proposal deals with unsecured debts. Your mortgage continues on its normal terms, and your lender can still act if you stop paying.

How long does bankruptcy last in Alberta?

For a first bankruptcy, the OSB says you are automatically discharged after 9 months, or 21 months if you owe surplus income payments, as long as you complete two counselling sessions and meet your other duties. Bankruptcy and proposals are federal, so the timelines are the same across Canada.

Can I sell my house to a family member before declaring bankruptcy?

Only at fair market value, and even then talk to a trustee first. Under section 96 of the Bankruptcy and Insolvency Act, a trustee can challenge a transfer at undervalue made before you file, and a court can reverse it. Selling cheaply to family to protect equity is a common mistake.