Archive for Category 'Mortgage', page 2

Question: If a person declares bankruptcy because of high credit card debt and owns a house with little or no equity in it, will they still lose the house as long as the payments are still made. Thanks

Answer: In general, no, if your house has no equity, you will not lose your house if you file bankruptcy.  To confirm this, speak to a bankruptcy trustee before you decide to file.  However, it is ultimately up to the mortgage company whether or not they will allow you to keep your house while bankrupt, so you should also get confirmation from them before you go bankrupt.

Question: I have a card that is holding a balance of $7000 and the limit is $6500. The huge mistake that I made was taking out quite a few cash advances while first daughter was being born and the expenses in her first year.

What I did not realize was the extra interest on cash advances.

Steps taken were scissors to the card.

Now we just cant seem to get the balance back to its normal payment. Made a $500 payment (minimum was $190) and the next statement showed a $2 increase in the balance after interest added.

We can only afford $300 payments which will help if we can get back to the $190 minimum.

Our mortgage is up for renewal and we considered trying to consolidate this CC into our mortgage but not sure if that helps.

Any advice?

Answer: You have a few options.  The first option would be to call the credit card company and ask if they can reduce the interest rate, or convert the card into a loan with a reasonable interest rate and payments of $300 per month.  They probably won’t want to trade a high interest credit card for a lower interest loan, but it’s worth a try.

Next, you could do as you suggest and increase your mortgage when you renew by the amount necessary to repay the credit card.  If there is sufficient equity in your mortgage and you can afford the mortgage payments, this option makes sense.

If that isn’t possible, you could try a debt management plan through a credit counsellor. If all else fails, a consumer proposal or a bankruptcy may be necessary to deal with your debts, but because you own a house those options should not be considered until you have discussed your situation with a licensed trustee.

Question: I recently closed a business and there was an outstanding amount of $50,000 owed to a bank. We had tried to negotiate a payment schedule with them, as we have excellent credit and did not want anything to tarnish this. We had agreed to a payment schedule, and awaited the documentation from the bank. A month passed, and we received a letter from a lawyer instead. We called the bank and they explained that it was out of their hands. We were appalled, but tried to continue to discuss the situation with the bank. I also left a number of messages for the lawyer, but we kept missing each other’s calls. End result, they got a judgment against us, and our house. We asked them to accept a 25% lump sum payment, and additional substantial payments on a monthly basis if they would remove the judgment. They said they would not, and that if we did not make substantial payments monthly, which we cannot afford, that they could force us to sell our home and recoup the proceeds from there. There is sufficient equity in our home to cover this, but barely. Is this correct, or if we continue to make payments, however small these may be, can they still force us to sell?

Answer: If a creditor has a judgment against you, and if they have registered the judgment on title against your home, the judgment as the effect of a second mortgage.   If you don’t make the payments they want, they can force a sale of your home.  In general, if they are getting payments, they will not go to the trouble of forcing a sale.  However, they have the legal right to do so.  We would advise you to consult a lawyer so that you fully understand all of the legal ramifications of your situation.

Question: ME AND MY HUSBAND IS PARTLY OWNER OF THE HOUSE 50%. THE HOUSE IS WORTH 570,000 AND THE MORTGGE IS 420,00.

ME AND MY HUSBAND SHARE IS 75,000 EQUITY, BUT I OWE $69,000, AND MY HUSBAND IS $63,000 IN CREDIT CARDS. BUT SEPARATE NAMES.

ME AND MY HUSBAND IS MAKING 80,000 COMBINE INCOME BEFORE AND I WAS IN DISABILTY FOR ALMOST 2 YRS AND LOST MONEY IN STOCK MARKET AND MY HUSBAND IS ON AND OFF IN THE JOB.

CAN WE KEEP OUR HOUSE THE 50% EQUITY ?ARE WE ALLOWED TO FILE CONSUMER PROPOSAL, SEPERATELY

Answer: Yes, it is possible to file a consumer proposal separately.  To file a consumer proposal, you must be insolvent, meaning your debts are greater than your assets.  If your house is worth $570,000 and the mortgage is $420,000, you are correct that the equity is $150,000, or $75,000 for each of you and your husband.  If your debts are less than $75,000 each, you are not technically insolvent.

However, with the decline in the real estate market in Canada this year, it is possible that your house is worth less than you think, so we recommend the following approach.

First, contact a real estate agent and have them give you a written appraisal, or comparative market assessment of your home, so that you have a better idea of what it will sell for.

Then, contact a licensed bankruptcy trustee and consumer proposal administrator to review your options.   They will want to review the appraisal, and get proof from the bank about the exact amount owing on the mortgage.  With this information they will be able to calculate the exact amount of equity in your house.

Then, research your options.  Many people ask the question “Will I lose my house because of my money problems?“.   Your trustee will be able to give you a good answer to this question.

If your debts are greater than your assets, a consumer proposal may be the answer for you, but a professional opinion is needed to help you make that decision.

Question: If I am 5 months behind –off and on payments because of sickness , will the lender put those in the rearer all in one and let met me pay it like that? Could that be considered, and play some kind of catch-up.?

Answer:  It depends on the lender.  In most cases a lender will allow you to defer one or two payments and add them on to the end of the mortgage.  However, once you fall three or more payments in arrears the lender will often begin taking steps to foreclose and recover their money.  However, given the increasing number of foreclosures that are happening, it may be possible to negotiate with your lender.  We recommend the following approach:

First, make a detailed monthly budget to determine what you can afford to pay over the next few months.

Next, call up the mortgage company and offer them a payment plan.  If your budget shows that you can afford to pay $1,000 per month, that’s what you should offer the lender.  If your normal payment was $800 per month, your lender may allow you to pay something extra each month until you are current.  The key is to present your lender with a plan to get back on track.

However, if you are five months behind and have no hope of getting caught up, and if your house is more expensive than what you can afford to pay, it may be wise to sell your house and pay off the mortgage, and find a less expensive place to rent.   If you are going to lose your house to a foreclosure, it is better to sell the house on your own, so that you can recover the maximum amount of money.

A credit counsellor may be able to assist you further if you have any questions about your options and alternatives.

Question: I am having some difficulty catching up on my mtg I have been in my house for 15 years and never missed any payments we had some unforseen bills this winter like the price of fuel to heat our home which but us back a little bit in our finances we don’t owe a lot of debt or spent a lot but I just can’t seem to come up with the money to pay the mtg at the end of the month we have been cutting back on everything but the mtg has been running about 1 week late for 2 months know any suggestions.

Answer: You have a number of options.

First, you could talk to the mortgage company and ask them to allow you to defer one payment; they would take the payment you are behind, and add it to the end of your mortgage.  By deferring one payment you are now current with your mortgage.   Of course you now have an extra mortgage payment at the end of the mortgage, but if you believe you will be able to stay current from now on, this may be a good solution.

Second, you could renegotiate your mortgage.  If you currently have 20 years to run on your mortgage, you could ask the bank to increase the amortization period to 22 or 25 years.  This would lower your monthly payment slightly, and therefore may make the payment more manageable.  Of course this also means you have just added 3 to 5 years of payments to your mortgage, which greatly increases the long term cost of the mortgage.

Finally, if the cost of the house is too great, you could consider selling the house and moving to a smaller house, or finding a place to rent.  No-one wants to sell their house, but if you are afraid that you will continue to fall behind on your payments, it is better to sell the house now while you are not too far behind, rather that waiting until you are far behind and the bank forecloses on your mortgage.

Question: Me and My wife had a house together. We are now divorced. She left the house but would refuse to sign to sell the house. I had many good offers but was not able to sell it because her name was on the properties. By the time I received judgement to sell the house, it was too late and went to foreclosure.
I receive a letter in the mail from CMHC that I owe $11000. Its basically a judgment against me. I am not sure if my ex-wife received this letter or not. I am trying to figure out what is my best option to resolve this. Am i solely responsible for this? What can I do at this point. Do I take her back to the court?

Answer: It appears that CMHC is pursuing you for $11,000.  If the mortgage was joint with your ex-wife, than they will also be pursuing her for the $11,000.

As for your options:  First, you could contact CMHC and attempt to negotiate payment arrangements.  You could offer to start making monthly payments.

Second, if you have good credit, you could get a loan and then use the money to repay CMHC.

If you have other debts, a consumer proposal or a bankruptcy may also be options.  Without knowing your full situation it is impossible to be more specific.

We recommend that you meet with either a credit counsellor or a bankruptcy trustee for a free initial consultation to review your options in more detail.

Questions: At what point can I get a mortgage during a consumer proposal? If so, what are the (ball park) interest rates usually offered? Would a refinance be better if I currently own my home? Do you think my current lender would renew my current mortgage if I have recently filed a consumer proposal?

Answer: The answer depends on your personal situation.  In most cases, if your existing mortgage is up to date, you will have no problem renewing your mortgage.  If you start a consumer proposal and then attempt to get a mortgage, it will be much more difficult.  There are some lenders that will give you a mortgage after your proposal payments have been in good standing for one year.  For more information, contact a mortgage broker (here’s a link to a mortgage broker that can find mortgages in most areas in Canada).  In most cases, if you qualify, the mortgage interest rate will be one or two points higher than you would get if you had perfect credit, but that will also depend on your income, equity in your house, and other factors.

Question: My Question is, my wife and I have separated and we own a house together and have other debts which we do intend to pay every thing off in the sale of our house. My problem is that I have moved out while my wife still lives in the home with the kids, but she also wants to move out which is not the problem. The problem is that I cant afford to pay the mortgage as well as trying to pay for rent. I can do this if I stop the mortgage payments, but what will happen if I do this as we do intend to pay off the balance of the mortgage in full when we sell the house so the mortgage company will get paid there money. So I need an idea on what the mortgage company may do if I stop the payments?

Answer: It depends how long it takes you to sell the house.  In most cases a mortgage company will wait at least three months before attempting to foreclose on a house due to non-payment of the mortgage.  Therefore if you were to list the house for sale today and sell it within the next three or four months, it probably won’t be an issue.  The mortgage company would simply recover their missed payments from the sale of the house.  However, if it takes longer than that to sell, it could be an issue.  We suggest you discuss your plans with a real estate agent, and with the mortgage company.

Question: When i became ill and could no longer return to work I went on CPP disability. I called each of my creditors and explained the situation. All (4 in total) but one decided to settle for a lump sum for 40% of the balance owing. It has been 9 months now and it is now in the hands of a collection agency. They are demanding the full amount plus the interest it has accumulated. They are threatening to take legal action, place a lien on my house and have the sheriff sell it. They said the papers were going to be sent out this week. I have a first and second mortgage and a few hundred in back taxes owing. After that is paid there still isn’t enough to pay the total amount to the creditor. I even offered 50% and it was refused. I will have to borrow that from a parent. What should I do, take my chances in court?  Will the judge do what they are threatening and sell the home of a disabled person and leave me homeless. Can I still deal with the original credit card company or is it too late? Someone told me to talk to the Ombudsman of the company. What is an Ombudsman? I don’t know what to do.

Answer: You should immediately contact a credit counsellor or a trustee in bankruptcy to review your situation.  There are a number of different options.

First, if your house has no equity (meaning that the value of the house is about the same as the amount owing for mortgages and property taxes) then there is no point in the court ordering your house to be sold, because all of the money would go to the mortgage holders, and the creditor would get nothing.  Therefore, it is unlikely that the court would do that.

Typically if you owe money a creditor can sue you can get a judgement, and the judgement is enforced by either putting a lien on your house (unlikely as discussed above) or garnisheeing your wages (very common, but impossible in your case because you don’t have wages, you get a pension).  It is therefore possible that, other than yelling at you over the phone, there is little that the creditor can do.

Again, I think your best option is to contact a credit counsellor or a trustee in bankruptcy to review your situation.