Where have some of your most meaningful memories been made?
The likely answer is your home.
While we often think of houses in terms of financial assets, a home serves a multitude of purposes, from being the refuge after a long hard week to the literal shelter for your family, to being a place of joy for celebrations and friendly gatherings.
At the end of the month though, your mortgage is yet another payment to be made, and in most cases, it’s the most expensive bill you likely owe every thirty days.
If you are having problems making ends meet, and are nervous that you don’t have the ability to make your mortgage payments, it may be time to seek out a debt solution for your mortgage.
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What if my mortgage is already in default?
If you’ve already missed one (or more) mortgage payment, your house mortgage is already in default.
The next step against you, as a borrower, is that the bank may choose to take legal action to recover what they have lent you.
The legal steps that the lender may take against you may leave you homeless, and bankrupt.
However, if the only debt that you struggling to pay is your mortgage, there are often settlement options you can legally negotiate to prevent you from being forced to claim bankruptcy or give up your home.
If you have not yet missed a mortgage payment, but fear that you may, contact your bank immediately.
Certain lenders will offer you a skip-a-payment option, that allows you to skip that month, while other banks have hardship programs to help you get back on your feet.
Being upfront with your lender earlier, rather than later, will help provide additional options to your debt payment.
What happens to my home if I claim bankruptcy?
Depending on which Canadian province you live in, you may be able to keep your house even after you claim bankruptcy.
This is based on bankruptcy exemptions, but the limits on the value that can be kept exempt are fairly severe, and unfortunately, most people that claim bankrupcty are required to sell their houses to pay their creditors.
If there is equity in your home, which means what your house is worth versus what is owed on the mortgage, you may be forced to pay the difference between the exemption and the equity.
In this case, while you are able to keep your home, you need to borrow the difference to pay back to the lender.
The obvious advantage of this option is that you can stay in your home, but the obvious disadvantage is that you are typically forced to find that sum of money to pay, either from family and friends, from outside income, or by borrowing elsewhere.
Can I renew and renegotiate my mortgage terms after a bankruptcy?
A bank does not want you to lose your home.
While it can be easy to become angry with lenders, ultimately they would prefer you to remain in your home and make payments on your home for many years.
Because of this, the mortgage company will typically allow you to renew your mortgage even after you claim bankruptcy.
This is advantageous if you’re able to make mortgage payments since you can begin to build your credit back up after claiming bankruptcy.
If you are anxious that you are going to miss one or multiple mortgage payments, meet with a Bankruptcy Canada trustee.
We can help explain what options you have and discuss your mortgage debt.
With debt professionals in each province in Canada, Bankruptcy Canada wants to have a no-obligation conversation so you can learn more about the options you have.