Finding Relief from Mortgage Debt: A Comprehensive Guide
Understanding Mortgage Debt
A home is often the most valuable asset one possesses. It’s not merely an investment, but also a sanctuary filled with cherished memories. However, maintaining this asset often comes with a significant financial commitment: mortgage payments. If these payments become overwhelming, it’s time to get help with mortgage debt.
Defaulting on Your Mortgage: What It Means
When mortgage payments are missed, the borrower is said to be in default of the mortgage agreement. This situation can put your property at risk and lead to severe financial repercussions.
Legal Consequences of Mortgage Default
When a mortgage goes into default, the lender (usually a bank) may resort to legal action to recover the amount owed. This action can involve forcing the sale of your home and pursuing you for any shortfall, accumulated interest, or legal costs incurred.
Negotiating Settlements: A Possible Solution
If your mortgage is the primary source of your financial strain, a possible solution could be negotiating a settlement with your lender. This step could help you evade bankruptcy or other legal actions, ensuring you get help with mortgage debt.
Bankruptcy: How Does It Affect Mortgage Debt?
When bankruptcy is declared, whether or not you can keep your home depends on the province you reside in. The process involves a trustee determining if there is equity in your home. Equity is the difference between the worth of your house and what you owe on your mortgage, including any outstanding property taxes.
Keeping Your Home Post-Bankruptcy
If there is a considerable amount of equity in your home exceeding the exemption applicable in your province, you might need to pay this equity to the trustee to retain your home. This payment could be made through borrowing from relatives or other financing options.
Renewing Your Mortgage After Bankruptcy
In most instances, your mortgage lender will permit you to renew your mortgage following bankruptcy. The bank would prefer you continue making payments over the next 25 years rather than risk a foreclosure and potential loss of future profit.
Your Trustee’s Role
A trustee, such as Bankruptcy Canada’s team, plays a significant role in bankruptcy proceedings. They assess the equity in your home and guide you through the financial implications of bankruptcy.
Free Debt Solution Consultation
If you’re battling to meet your mortgage payments, it’s wise to consult with a debt professional from Bankruptcy Canada. We offer a free, no-obligation chat, either in person or over the phone, to help you explore your options and get help with mortgage debt.
