Archive for Category 'Mortgage', page 3

Question: How do I keep from having to be forced to add his debt to the mortgage?? It’s been done so many times in the past that after 9 years, I owe more than I paid for the house!!! I can’t handle it again. How do I keep our finances separate? Do I have to tell him not to move back home?

Answer: Legally, you are never “forced” to add someone else’s debt to your mortgage.  A debt only appears under your name if you sign for it.  Where issues like this are involved, we recommend that you consult a lawyer to determine how to protect yourself before you get back together.

Question: I have the following debt:

TD GM VISA $25000
CIBC VISA $15000
MBNA Master-card $6000
MBNA LOC $21500
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Car loan $4000 (with my ex): (this car is under his name)
Car Loan $13500 (jointly with my spouse
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House purchased on May 2007
purchased price $296000
Mortgage $288000
its a joint property with my spouse

currently i am not working for physical condition (accident). now it is very hard for me to pay the high monthly credit card bill.

what can legally my creditors/ collection company do against me, when i am unemployed. Can they sue me? or take equity from our house (jointly with spuose)?

Answer: If you don’t pay your creditors, their first step will be to send you letters and call you to attempt to collect the money.  If they are not successful, the next step may be to take you to court and sue you.  If they do, they will probably be successful, and obtain a judgement against you.

With a judgement, they can enforce the judgement by obtaining a garnishment order from the court, which allows them to garnishee your wages.  Since you are currently not working, that is not something you need to worry about until you are back at work.

In order to take equity from your house they would, after getting a judgement, need to return to court and place a lien on your house.  Then, to get any money from the lien, they would either need to wait until you sell your house, or start foreclosure proceedings.  In your case both of these scenarios are unlikely.  It would be pointless for a creditor to spend money on lawyers to get a lien on a house that has no equity.  If they foreclosed there would be no money left over after the mortgage and real estate fees were paid, and creditors do not typically put a lien on a house and then wait for years until you sell.

You should probably consult with a bankruptcy trustee to review your options; all of the trustees on this site provide free initial consultations.  They may recommend that you wait until you are working again to file bankruptcy, or they may suggest a proposal to creditors, if you are not able to repay the debts on your own, and you want to prevent a wage garnishment.

Question: Can you still get a mortgage eventhough your credit is in r9 or r7? right now i am renting a condo for $1100 a month & pay all utilities. worked fulltime & earn 19 per hour. spouse is earning wsib benefit but eventually will be looking for a job.

Answer: Yes, it is possible to get a mortgage with poor credit.  However, if you are an R7 or an R9 the mortgage will be very expensive, and so may not be a good idea.

In most cases it is best to work on repairing your credit and saving money before you apply for a mortgage.  That may mean talking to a credit counsellor about a debt management plan to pay off your debts, or perhaps even filing a consumer proposal or personal bankruptcy in Canada to discharge your debts and give you a fresh start.

Question: I am a single parent putting my son through to be an engineer. In 2005 after 9 years in a law suit, I was awarded 112,000.00 of which I received 63,000.00. I assumed that the insurance firm had deducted taxes. Not so…I now owe Rec Can 31,000.00., my credit card debt is also very high apx. 25,000.00, and my secured line of credit and mortgage is 112,000.00. My home is valued at apx 120,000.00. My monthly income consists of CPP disability of 900.00, LTIP of 643.00 and $200.00 spousal support and 700.00 child support, totaling 2443.00. If I declare bankruptcy, will I lose my home or do I just continue to pay my mortgage and line of credit payments and declare bankruptcy on my other unsecured debts?

Answer: The answer depends on the value of your home.  If you declare personal bankruptcy and there is no mortgage on your home, then yes, it is likely that you will lose your home.  However, if there is a mortgage on the home such that the amount you owe is approximately the same as the value of the home, you will probably be able to keep your home, provided you continue to pay your mortgage.

There are a number of factors to consider when making this decision, so we suggest you consult a licenced bankruptcy trustee to review your situation before you decide on the appropriate course of action.

Question: I filed for personal bankrupcy on Oct\06 as of yet I have still not been discharged. I started a company secured funding from various goverment agencies and personally secured loans from lending institutions as well as personally putting in significant personal money. After 2 years I had no choice but to declare personal bankruptcy. I moved my mortgage to get money to pay off personal debt because at that point the bank wouldn’t refinance it. Now We are paying a high interest rate. My fault I know.
I am now working full time as well as my husband and our credit was perfect up until the business I tried to start. My question is is there any way to get my mortgage with some one who could give us better terms then 11.989%? Help please any advice would be greatly appreciated .

Answer: The short answer is probably not.  With an undischarged bankruptcy on your credit report it is difficult to qualify for a mortgage, and even more difficult to qualify at a lower rate.  You can research your mortgage options to see if a better deal is available.  Another option would be to get a co-signer with good credit.  However, your best option will probably be to wait until you are discharged from bankruptcy and then apply to refinance at a lower rate.

Question: Hi,Thanks for reading my question, I live in the province of Quebec. My question is that I have 2 companies that owe GST and PST. Between both I would say close to $200,000. Personally I owe about 30,000 in credit card debt. We (wife and I) have a 200K mortgage, house value is around 350K. I also have 20K of RRSP. My car is a company lease. I am thinking of closing and bankrupting both companies as I will never be able to catch up. Should I go personal or corparate bankruptcy? I figure 50% of the net value of the house is mine around $75K. How does it work? Do I have to sell my portion of the house to my wife so the house is not affected?
Any option will help as this is causing a big stress on our relationship. Thanks

Answer: In almost all cases the correct answer is for you to file personal bankruptcy, not corporate bankruptcy.  Here’s why: To hire a trustee to bankrupt your corporation could easily cost you $10,000 or more (trustees like to get paid); it’s an expensive process because in a corporate bankruptcy the trustee must notify all creditors, place an ad in the newspaper, hold a creditors meeting, and perform many other procedures.

Once the corporation is bankrupt, GST and PST will then pursue all directors of the corporation personally for the unpaid amounts.  You may then need to go bankrupt personally as well, so there is usually no point in also bankrupting the corporation.

With respect to your personal situation, it appears that your house has equity of $150,000 ($350K – $200K), so you are correct that your share is worth $75,000.  Unfortunately you cannot just sell your portion of the house to your wife and then go bankrupt.  You are required to disclose to the trustee all dispositions of real estate that you made within the last five years, so even if you sold the house to your wife today and then went bankrupt tomorrow, the trustee would still want your $75,000 share of the house.

There are a number of options to deal with this, including having your wife get a second mortgage for $75,000 and buying you out (so that you have the $75,000 to pay into your bankruptcy estate), or perhaps to use to file a proposal under Division 1 of the Bankruptcy & Insolvency Act.

As you can see the options for dealing with this situation become very complicated, so expert advice is necessary before you decide how to proceed.  We strongly advise you to consult with a bankruptcy trustee to help you determine the best course of action.

Question: My mom owns her home (no mortgage) but has a line of credit owing with the house as collateral. If she was to declare bankruptcy would she need to sell the house to pay off the line of credit owing or would it be considered a debt and be written off with the bankruptcy? Any help would be appreciated. She is located in Ontario.

Answer: Since the line of credit is secured by the house as collateral, it is exactly the same as a mortgage (which is simply a loan secured by a house).  The only difference between a mortgage and a secured line of credit is that the mortgage has fixed terms of repayment (you pay the same amount each month), whereas you can make extra payments on the line of credit whenever you want.

To determine what will happen with her house if she goes bankrupt, the trustee will need to know the value of the house, and the amount owing on the line of credit.  If there is significant equity, she will either need to pay that equity to the trustee, or sell the house.  Either way, the line of credit will end up being paid as a result of the sale of the house, and therefore it is not written off in the bankruptcy.  This is a confusing area of the law, so we suggest you consult a bankruptcy trustee for further information.

Question: how long do you have to wait before applying for a mortgage after personal bankruptcy?

Answer: You can apply for a mortgage anytime, even while you are still bankrupt (provided that you disclose to the lender that you are bankrupt).  However, it is very difficult to qualify for a new mortgage while you are bankrupt.  Your chances of being approved for a new mortgage increase as time passes after you are discharged from bankruptcy.  In other words, you have a better chance of getting a mortgage four years after you are discharged than you have one year after being discharged.

To increase your chances of qualifying, you want as high a down payment as possible.  You can consult a mortgage broker for more information.

Question: my husband has his own business. he is in his second year of operation and this there wasn’t work. prior to this, he had a steady job, great credit rating etc, but its been a long winter.
he has a leased car which is behind in payments, insurance that hasn’t been paid, credit cards that are behind and a mortgage on a rental property in his name that is behind.
he is subsizing the rent there, as the rental amount doesn’t cover the mortgage/ fees.
he is starting to work again after 5 months of zero income but i fear the damage may be done. the phone is ringing at all times of the day/night and yesterday we came home to a bailiff’s card stuck to our door, and registered mail for pick up at the post office. i’m starting to feel sick!
I’ve been able to float our bills for the house myself. i make good money and have a great credit rating.
our house is under my name, as well as mostly everything to do with it.
what are the implications to my credit rating? what can i do? what can he do? do we have options?
what would the bailiff’s card/ regsitered mail be? would the bank take the rental property?
Help!!

Answer: First, unless you have joint debts, your husband’s credit rating is different from your credit rating.  If you own the house, and it has always been in your name, his credit problems do not impact on your house.

Having said that, this is a very serious situation.  Bailiffs are calling because they want to reposses something (a car, leased equipment); registered mail usually means a creditor wants to take you to court.

The solution is to immediately contact a financial professional, probably a bankruptcy trustee, to review your husband’s situation to determine what strategies can be used to get back on track.  If his income will pick up he may be able to save the business; if not, it may be necessary to close the business and go back to being an employee.  Either way, he needs to get financial advice immediately before the situation gets worse.

Question: My Husband and I are talking about divorce. We are in Debt about twenty five thousand dollars and not including our home. Of course I can not afford to support myself and children on my income and pay half of the debt. I don’t want to have to leave my home, could I file for bankruptcy and still keep my home if I can prove I can make the payments.

Thank-you.

Answer: Yes, it is possible to keep you home if you file for bankruptcy. There are two considerations. 

First, can you afford to keep paying the mortgage and all of your other housing expenses (property taxes, utilities, repairs an maintenance), or would it be cheaper to rent?

Second, if your house has equity (meaning the house is worth significantly more than what is owing on the mortgage), you cannot go bankrupt and keep the house, unless you pay an amount equivalent to your share of the equity into your bankruptcy.  The rules are also different depending on where you live, so we strongly recommend that you contact a bankruptcy trustee to review your options before you make a decision.