What are my options if I have missed mortgage payments or have a house I cannot afford?

If you are about to fall behind with mortgage payments, it is important to take action as soon as possible. If you are going through a temporary cash-flow crunch, it is best to speak with your mortgage company before payments are missed. Your mortgage company might be able to offer some temporary relief until you get back on your feet.

If you have experienced a temporary cash-flow crunch resulting in missed payments and your current mortgage company is not willing to work with you, it would be a great idea to speak with a mortgage broker. Too many missed payments might force your mortgage company to initiate legal action such as a foreclosure/mortgage sale. If your financial situation has since improved, a mortgage broker might be able to find a new lender to pay-out the current mortgage holder and prevent a foreclosure/mortgage sale.

If you expect to struggle with future mortgage payments due to the costs of servicing other non-mortgage debt, it would be a great idea to speak with a Licensed Insolvency Trustee. In some cases, a Consumer Proposal or a Bankruptcy will help people keep their homes by formulating options to address non-mortgage debt. A significant reduction or the elimination of non-mortgage debt can help boost monthly cash-flow to better manage mortgage and other housing related expenses.

If you cannot afford your home due to reasons that are not temporary in nature and have no protection through insurance; you should speak with a realtor immediately to determine if you can sell your home for at least what is owed. Even if you cannot afford future mortgage payments, you will have a short window of opportunity to sell the home before the mortgage company takes steps to foreclose on the home. If you can sell before a foreclosure/mortgage sale, you might be able to walk away with some cash after the mortgage and costs of selling are paid. Avoiding a foreclosure/mortgage sale will also make it easier to qualify for another mortgage in the future when your financial situation improves.

If you are not able to sell and the mortgage company takes the home, you will still be liable for any loss incurred by the mortgage company. After the mortgage company takes possession of the home, they will take measures to re-sell the home to a third party. If the home re-sells for less than what is owed on the mortgage, you will be liable for the difference as well as costs incurred by the mortgage company. These costs can include legal fees related to the foreclosure/mortgage sale, as well costs of carrying the home until a new buyer is found.

If you had to purchase mortgage insurance through Canada Mortgage and Housing Corporation (CMHC), or a similar entity; generally, the loss incurred by your mortgage company will be covered through CMHC, but then you will be liable to CMHC for repayment. If you cannot pay CMHC, they have many options to enforce collection, such as, intercepting future tax refunds and/or garnishing bank accounts or income.

If you have no other reasonable options, a Consumer Proposal or a Bankruptcy will protect you from creditors and cease legal/collection action for balances owed after a foreclosure/mortgage sale.

If you are struggling with debt or the threat of foreclosure and would like to explore options, please do not hesitate to contact our office for a free consultation.

If you are looking for advice, or a second opinion about your debt, it doesn’t cost a thing to talk about your options. Every situation is unique and viable options for dealing with debt, besides a bankruptcy or proposal, might exist. Together, we will spend our time discussing those options, personal finance best practices, and suggestions for any gaps that might exist in your current financial plan. If we determine a bankruptcy or proposal might be worthwhile options, Jaime Johnson & Associates is the only local firm where you will deal exclusively with a licensed insolvency trustee for every aspect of your file. We pride ourselves on ensuring the best quality of service is provided. There are no departments, no call centers, and no layers. Together, we will ensure you are confident in making an informed decision and will work on putting your new financial plan into place. For a free consultation, please call or text (506) 645-1814 or email jaime@tackledebt.ca; or visit www.tackledebt.ca.