Walking away from mortgage/home

I hope you opened a bank account at a different bank, not at the same bank because in the end the bank can access any accounts you have with them unless someone else's name is on the account (they can still access it but it takes longer).

You say your mother-in-law is on title. Strange that she wouldn't want the house sold as the foreclosure costs could easily eat up any remaining equity in the home.

Banks have one concern and that is to recoup their losses. When you get a mortgage on a home you have to get a bank appraisal. Reason for this is the bank wants to know the "worst-case scenario" in the event the home goes into foreclosure, as is the likely case in your situation. Don't think for a minute that the bank doesn't know exactly, to a dime, what their profit/loss situation is on your home. You have only met with front-line banking staff who have little training/knowledge in mortgages. Unfortunately for you it seems your past creditworthiness set you up for overdraft protection.

You will likely be able to live in your home for at least 3 - 4 months without being forced to move. Once the bank doesn't receive mortgage payments after a few months you and others on title will receive a Notice to Foreclose. I believe it is pretty standard that you are then given a 30 or 60 day time to make payment. Then after that the matter gets handed to a collection/foreclosure department at the bank and then you and others on title are served with foreclosure bank date. At some point you will be given a date that you have to move out of the property.

In the meantime I'd recommend you continue to pay your utilities in a timely manner as you will need to get utilities at your next place and if you live in the same city after you move you can transfer your utilities over to new place. The bank would want to protect their property and no one wants to have frozen pipes.


If you are going personally bankrupt you need to consult with a bankruptcy trustee AND, most importantly, read up on bankruptcy. There are forums on bankruptcy which you should log on to get answers to your questions.

I'm a bit puzzled by your questions regarding bankruptcy as well as your overall situation. You seem to have access to a line of credit and you also seem to be in a position to set the selling price of your home. In other words, you have options. Why not dump the price, get out of the mortgage/house and move on with your life?

Remember that anything you do 12 months prior and 12 months after going into bankruptcy you can be held accountable for. Don't think for a minute that you are the only person who hid money and then tried to go into bankruptcy. You had better weigh the full consequences of bankruptcy and how it would affect you. Can you live without credit cards, lines of credits for 7+ years? Are you prepared to pay 20% interest the next time you need to finance a car loan? Can you stomach having to pay to a trustee anything you make over a few thousand dollars each and every month you are in bankruptcy? Lots for you to consider.

Perhaps you just need to get out of the house you are in and learn to live within your means? Much simpler.
 
Have you made your intentions known to other parties?

I would advise the ex and their mother that you can no longer carry the costs of the house. I would offer that they can either:

a) buy you out of the house for $X amount (being 1/3 of the equity in the house as of the date of separation, plus any increase in equity from the point you became solely responsible for the mortgage) - note I would take into consideration any large deposits that the ex MIL may have made and deduct that so she gets her initial deposit, if any, plus any increase in value to the date of separation; or

b) they agree to sell the house for an appraised value. That you will agree that each party gets an appraiser and that the list price will be the average amount of the 3 appraising. That you will provide them access to the house as soon as reasonably possible to have their appraiser in so that this can be dealt with ASAP.

Should they fail to do either of the above in a reasonable time frame, that you will be forced to cease payments on the mortgage and abandon the house. State that you don't want to do this, as it would impact the credit of all the parties, but that you have been forced to carry the burden too long due the unreasonable actions of the other parties.

That unless they are willing to come to the table with another reasonable alternative, that mortgage payments will cease on X date (about 2 mortgage payments away to light a fire under their butts).

But make offers. Make a bunch of reasonable offers. But set deadlines. Than file a motion to sell the house and move out. Advise them of you new location (so that they can contact the kiddo) and proceed from there.

I think if the ex MIL thinks that her investment is going to down the drain, she may actually be enticed to act reasonably.
 
arabian said:
I hope you opened a bank account at a different bank, not at the same bank because in the end the bank can access any accounts you have with them unless someone else's name is on the account (they can still access it but it takes longer).

You say your mother-in-law is on title. Strange that she wouldn't want the house sold as the foreclosure costs could easily eat up any remaining equity in the home.

Banks have one concern and that is to recoup their losses. When you get a mortgage on a home you have to get a bank appraisal. Reason for this is the bank wants to know the "worst-case scenario" in the event the home goes into foreclosure, as is the likely case in your situation. Don't think for a minute that the bank doesn't know exactly, to a dime, what their profit/loss situation is on your home. You have only met with front-line banking staff who have little training/knowledge in mortgages. Unfortunately for you it seems your past creditworthiness set you up for overdraft protection.

You will likely be able to live in your home for at least 3 - 4 months without being forced to move. Once the bank doesn't receive mortgage payments after a few months you and others on title will receive a Notice to Foreclose. I believe it is pretty standard that you are then given a 30 or 60 day time to make payment. Then after that the matter gets handed to a collection/foreclosure department at the bank and then you and others on title are served with foreclosure bank date. At some point you will be given a date that you have to move out of the property.

In the meantime I'd recommend you continue to pay your utilities in a timely manner as you will need to get utilities at your next place and if you live in the same city after you move you can transfer your utilities over to new place. The bank would want to protect their property and no one wants to have frozen pipes.


If you are going personally bankrupt you need to consult with a bankruptcy trustee AND, most importantly, read up on bankruptcy. There are forums on bankruptcy which you should log on to get answers to your questions.

I'm a bit puzzled by your questions regarding bankruptcy as well as your overall situation. You seem to have access to a line of credit and you also seem to be in a position to set the selling price of your home. In other words, you have options. Why not dump the price, get out of the mortgage/house and move on with your life?

Remember that anything you do 12 months prior and 12 months after going into bankruptcy you can be held accountable for. Don't think for a minute that you are the only person who hid money and then tried to go into bankruptcy. You had better weigh the full consequences of bankruptcy and how it would affect you. Can you live without credit cards, lines of credits for 7+ years? Are you prepared to pay 20% interest the next time you need to finance a car loan? Can you stomach having to pay to a trustee anything you make over a few thousand dollars each and every month you are in bankruptcy? Lots for you to consider.

Perhaps you just need to get out of the house you are in and learn to live within your means? Much simpler.
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I have been paying all the bills to do with utilities, childcare, etc. The city just tacked my water/garbage bill over to my taxes....but I have changed house onsurance etc over to new bank and account. I have been off and on work lately, and that will continue, I have no choice but to put a couple months rent aside for emergency, then pay what I can after that.
I have been wanting to sell the place for a couple years now, the last mediation with mil was decided that she could put it up for 460,000 privately to recoup what she calls her investment in the house, either I agree with that or nothing is agreed on. It sat on kijiji ads for a year at that, I then lowered it to 395000 a few months ago as suggested by lawyer to hope for a private offer, I have had multiple showings with no further interest after that, thanks to poor build quality and few issues. I have done what I can to keep the house in decent condition, cleaning and some painting, having the furnace repaired, and some plumbing issues fixed. So with about 390 owing still its hard to go lower without having the other party refuse the offer in court due to obvious reasons.
I warned the mil I am having problems making the payments even as far as telling her forclosure is a possibility for a while due to my job and restrictions as a single father on how far I can go for work with the kids, I can't drag them from school to school and keep them from their mother being able to visit them even though visits happen maybe every 3 months. All she did was email me back and said don't bull$hit me, I know you can make the payments and if you dont your credit rating wont even allow you to rent a place, i'll be there to take the appliances I bought you guys when we all moved soon then, and i'll see you in court. So she won't take her name off the house without a large sum of money, and I wont qualify for a mortgage now even if she took her name off the house and I am stuck with a house I can not afford I do not want, she has told my stepdaughter that I will rott in this house and there is no way she is signing anything. So I guess I could email her that we need to sell this house to break even or close to it and go our own ways or mine and maybe her credit rating will go down the tubes and we will both owe lots of money.
She has been divorced 3 times so she knows all about some of these processes. She has always gotten what she wanted which kind of scares me.
The lawyer I talked to last said the fastest cheapest easy way is to take a private offer back to the last mediator, and or forward it through some process. Otherwise it goes through a long fair process, and will probably involve a higher listing price, appraisals and market evaluations, lawyers and court fees, and the commission.
Financially I am screwed unless she plays ball, even if she allows a quick private sale, I will be paying back my overdraft and owe the city taxes and utilities. The only way the mil will play ball is if the bank starts withdrawing from her. Then her wonderful temper will take control and she will be phoning anyone she can ripping them a new one.
Anyhow she is stubborn, she wants a big chunk of cash to get her name off the house, but That does not mean I can sell it after, last time I made a deal with her she pulled out of it last minute.
I am at a loss now, just go with the flow I guess, and I did look into the bankruptcy, If I qualified I would have to buy back my truck making payments for it, if I wanted it or sell it, I would have to give up all credit cards, have not applied for any new credit in the last year. I would have to give up any income tax returns, and pay the bankruptcy guy an unreal amount of money monthly If I were to return to full work again. Up to 2 years of paying them around $1200 a month plus my truck payments, who knows what the foreclosure would include in that, I never asked about that at the time, I am sure the foreclosure is a whole additional thing.
I feel overwhelmed, I feel I have almost no control over my future especially financially for who knows how long!

Edit:I have previously offered the mil the whole home for nothing, she refused that and wants anything back that she helped with money and appliance wise and that she can not be approved for the assumeing of mortgage, she says her living there free for 2 years amounts to nothing in terms of the amount she is owed. Also my last legal advise was to drop the price a lot on kijiji and give it a bit of time at the new price before further action. The stbx has no problem letting the house go, she does not expect to make money off of it and says she sign anything as long as I pay the notary or lawyer for her
 
The key thing about bankruptcy is that your monthly income should be below the govt approved level for a single person....

For the car and stuff, most of the time you can let them take it....

Also depending on your province some about of stuff is covered that you get to keep like in Qc you can keep your house furnishings up to 6k and business equipment.

Bankruptcy and Divorce are brothers they go together like peanut butter and jam, how else are lawyers going to be paid by middle class people?

Also as I explained earlier, if the house is sold below the mortgage amount the CMHC will come after you for the difference.
 
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Links17 said:
The key thing about bankruptcy is that your monthly income should be below the govt approved level for a single person....

For the car and stuff, most of the time you can let them take it....

Also depending on your province some about of stuff is covered that you get to keep like in Qc you can keep your house furnishings up to 6k and business equipment.

Bankruptcy and Divorce are brothers they go together like peanut butter and jam, how else are lawyers going to be paid by middle class people?

Also as I explained earlier, if the house is sold below the mortgage amount the CMHC will come after you for the difference.
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Ahh yes, if only I can stop the full bankruptcy and minimize it by just doing foreclosure but it seems to go hand in hand. All I can do is keep badgering the bank to stop the mortgage and at least keep my other accounts in the good. at least the house cmhc can go after all of us, and I have a chance to keep sumthin if I can avoid the bankruptcy. I am going to make a couple phone calls and try to get transferred to another department that might be able to help. Going to the branch, emailing, and phoneing has not helped thus far, I just hate to make the threat that I will forclose and go bankrupt...and just ask for working together for only a forclosure.
Notifying the mil just got me laughed at, and she threatened she is taking all her appliances out of the house now, and then said lets talk face to face.
 
I am concerned that you might have incorrect information regarding bankruptcy and I urge you to perhaps go and talk to a different bankruptcy trustee. If you are paying child or spousal support that amount comes off the top before you have to pay an overage to the trustee (overage being 50% of income over the provincial personal exemption). I believe the personal exemption amount is around 2000.00/month for someone with no dependants. So, for example, if your take home pay is 5,000.00/month and you pay 1500.00/month in SS you are looking at 3500 - 2000.00 (personal exemption) = 1500.00 - 1/2 of that is 750.00/month that is paid to the trustee/your bankruptcy estate. There are other exemptions such as medical, cost of work things, etc. I know about this as my ex claimed personal bankruptcy several years ago. He told me that if he didn't have to pay me substantial SS he would have to pay the trustee. You are allowed a certain exemption for home equity - in some provinces 40k is exempt.

Please get some accurate information regarding bankruptcy and/or other alternatives for going forward. Regarding the house you have to ask yourself if, after paying property taxes, utilities and general maintenance if it is cheaper to live as a renter or a home owner? Downsizing isn't a bad thing at all.
 
Yes my ex certainly had bankruptcy work in his favour. A court order with a substantial SS payment to me (after he had hidden/disposed of our personal assets) kept his overage payments down and he was discharged in 3 years (9 months for people who are first time bankrupts and who do not have to pay overage). Meanwhile I paid hefty tax on the SS (which was really my money to begin with). So the OP could conceivably pay off the ex/MIL through an order on consent, keep his house and have all of his personal debts wiped out in a few years. Then he can brag about how much he has paid to his ex in later years when in court to have the SS eliminated.
 
arabian said:
Yes my ex certainly had bankruptcy work in his favour. A court order with a substantial SS payment to me (after he had hidden/disposed of our personal assets) kept his overage payments down and he was discharged in 3 years (9 months for people who are first time bankrupts and who do not have to pay overage). Meanwhile I paid hefty tax on the SS (which was really my money to begin with). So the OP could conceivably pay off the ex/MIL through an order on consent, keep his house and have all of his personal debts wiped out in a few years. Then he can brag about how much he has paid to his ex in later years when in court to have the SS eliminated.
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I pay zero support, I receive zero support, for children or spouse, I have a nanny, or had one while working full time, I have custody and primary care and control of just the one young kid right now, the other moved out for now. I have had zero help with payments on the home from anyone other than the original help from mil when first moving in. The bankruptcy info you list sounds about right, except I think the fellow said 2 years instead of 3. I might have that mixed up with something else he said, but yeah I would be paying a lot over 2 maybe 3 years just to be rid of this house, but it would cost me in court and lawyers costs either way to be rid of it, and forcing the sale does not happen anytime soon after the first court date even happens. I have been desperate to downsize for well over a year, unfortunately delays by the mil, lawyer suggesting cheaper ways to workmthrough selling privately, and being away with work have all brought me to this point, bonus is it sounds like I may be going back to work in a few weeks almost full time, so I might be able to fight my way out of debt and help to keep paying off the house so the mil can get her money and I can keep some of my credit rating....no guarantee the job will stay full time though...
The stress of all this doesn't help either, its going to kill me or sumthin. Be nice if the mil could pay for her house for a while...apparently I pay and she is entitled to at least a third when she feels like selling lol.
you guys are pretty much bang on with the bankruptcy, plus I kiss anything i recieve from income tax returns goodbye, and most likely have to sell my truck and get something in the 5000$ range, and the house would be a loss, but never asked about the house and if cmhc is going to come after me even though I go bankrupt. Either way its gonna end rough soon or later.
 
When/if seriously considering bankruptcy it is best to talk to more than one bankruptcy trustee. Trustees aren't like lawyers or accountants and graduating from university is not required. Trustees receive their certification/license from taking courses and passing a test. Trustees are answerable to a lame-arm of the federal government - Office of the Superintendent of Bankruptcy (OSB). There is no governing body for trustees like you have with lawyers and accountants. Lousy, dishonest bankruptcy trustees are commonplace. You can be told diametrically different things by 2 different trustees so listen carefully when you next speak to one. If you have questions that persist after your meeting you'd be best to contact the Office of the Superintendent of Bankruptcy directly (phone numbers for each Province).

There is ample information online about bankruptcy, however, over the past few years there have been notable changes to the Bankruptcy and Insolvency Act (BIA). Debts which are not discharged from bankruptcy include Student Loans, Child or Spousal Support, and sometimes CRA debt (just to name a few). A mortgage debt, such as the one you refer to - CMHC, would be discharged. Length of time in bankruptcy is outlined online on any number of bankruptcy trustee websites (they seem to get that part correct). I would recommend that you also read the bankruptcy Act which is available online. I am certainly no expert on the matter, just an interested party in another bankruptcy case, so you should definitely seek professional advice if you decide to go that route.

You have been posing on this forum for a number of years and I think you have received all the advice one can get on the situation you are in. You seem to be intent on paying down your mortgage so your MIL receives her 1/3 share of proceeds of house. If your house were to sell for what is owed then your MIL would receive her 1/3 share = 0 + her 1/3 share of costs. You speak of stress. Sometimes we can be our own worst enemies. It has been 3 years since your separation? You have been paying into a mortgage and you have no equity in your home and even if you did you would only have 1/3 of the equity. Unless your mortgage payment and home maintenance is notably less than what you would pay for rent, I'd get that house sold asap and move on with your life.

Good luck
 
arabian said:
When/if seriously considering bankruptcy it is best to talk to more than one bankruptcy trustee. Trustees aren't like lawyers or accountants and graduating from university is not required. Trustees receive their certification/license from taking courses and passing a test. Trustees are answerable to a lame-arm of the federal government - Office of the Superintendent of Bankruptcy (OSB). There is no governing body for trustees like you have with lawyers and accountants. Lousy, dishonest bankruptcy trustees are commonplace. You can be told diametrically different things by 2 different trustees so listen carefully when you next speak to one. If you have questions that persist after your meeting you'd be best to contact the Office of the Superintendent of Bankruptcy directly (phone numbers for each Province).

There is ample information online about bankruptcy, however, over the past few years there have been notable changes to the Bankruptcy and Insolvency Act (BIA). Debts which are not discharged from bankruptcy include Student Loans, Child or Spousal Support, and sometimes CRA debt (just to name a few). A mortgage debt, such as the one you refer to - CMHC, would be discharged. Length of time in bankruptcy is outlined online on any number of bankruptcy trustee websites (they seem to get that part correct). I would recommend that you also read the bankruptcy Act which is available online. I am certainly no expert on the matter, just an interested party in another bankruptcy case, so you should definitely seek professional advice if you decide to go that route.

You have been posing on this forum for a number of years and I think you have received all the advice one can get on the situation you are in. You seem to be intent on paying down your mortgage so your MIL receives her 1/3 share of proceeds of house. If your house were to sell for what is owed then your MIL would receive her 1/3 share = 0 + her 1/3 share of costs. You speak of stress. Sometimes we can be our own worst enemies. It has been 3 years since your separation? You have been paying into a mortgage and you have no equity in your home and even if you did you would only have 1/3 of the equity. Unless your mortgage payment and home maintenance is notably less than what you would pay for rent, I'd get that house sold asap and move on with your life.

Good luck
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I am trying to sell it at rock bottom price right now, mil says I will rot in this house. I will seek alternate legal advice, I feel as though maybe my lawyer is trying to do things for me in a cheap easy way, just lengthy. Is it best to get a lawyer that does not have to deal with a firm? Does the firm handcuff them a bit when it comes to them suggesting things, they do not want to give the firm a bad name, but as a self employed lawyer they will be like a pit ull for you?
I thought maybe he had lots of resources at his disposal and I was told he was an awesome lawyer by a couple of people sitting outside of the court room. He seemed to have complete control of knowing what was going to happen all the time. Maybe I have to tell him firmly to force the sale, I would do ot myself diling the motion, but there are 3 parties and a divorce involved so I don't want to mess up.
 
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