Your home is probably the most important asset you have. Not just financially—it’s where you and your family live, and have created memories. Of course, your mortgage payment is just one of many bills you have to pay every month. If you’re starting to worry about your ability to make your mortgage payments, it’s probably time to think about a debt solution.
Missed some mortgage payments?
A mortgage in default means that the borrower (you) has not met their obligations under the mortgage agreement. Usually, this means you’ve missed one or more payments. In such a case, the bank (lender) may take legal action to recover what you owe on your home or in missed payments. Legal actions may include forcing the sale of the home and further pursuing the borrower for any shortfall, interest or legal costs. If your mortgage is the only debt you have a tough time managing, you might consider negotiating a settlement with the lender to avoid bankruptcy or other legal actions.
Can you keep your home in a bankruptcy?
Maybe. It depends on which province you live in. In a bankruptcy, your Grant Thornton trustee will determine if there is equity in your home. Equity is defined as the difference between what the house is worth, and what is owed on the mortgage (including outstanding property taxes). If there is equity in your home that exceeds the applicable exemption in your province, in order to keep your home you may be required to pay this equity to the trustee—perhaps by borrowing from family, or other financing.
What about mortgage renewal?
In most cases, the mortgage company will allow you to renew your mortgage after bankruptcy. The bank would rather have you make payments to them for the next 25 years than to foreclose and risk losing all the future profit.
If you’re worried about your struggles to make your mortgage payments, meet with a Grant Thornton debt professional for a free, no-obligation chat, in person or over the phone, to learn more about your options.