Legal Advice

[OilKiller]

Hate to air dirty laundry, but CP is a wealth of knowledge and I need some serious advice. It looks like I will have a judgement against me put through in about 60 days. It has to do with my property and a balance owing on it because of the insanely high price paid for it at the height of the market and some money trouble for the wife and I.

The judgement will end up being just under 80k after court fees and such are added. Are there any lawyers or students in the know that can tell me what happens after this goes through? Do they garnishee wages, seize bank accounts, take my crappy old car? Can I arrange with the courts to make payments?

Never had a judgement against me before so I have no idea what happens next and I really can't afford legal counsel (and don't qualify for legal aid). I am really trying hard to avoid bankruptcy, but I'm not sure if it really is my only option. Can anyone who knows offer advice or at least let me know what may or may not happen? Thanks.

[Hockeyguy15]

Sorry I don't know anyone that can help...My sister is first year law but this is probably over her head...

Good luck though!

[Finner]

As in you are foreclosing on your house?

I'm not sure if a bankruptcy would wipe something like this out but you could consider it, so you could start new, (especially if only one of you and your wife filed, leaving the credit of the other intact).

Not sure about the garnishment if you choose to try and pay it back.

Full Disclosure: I am not a lawyer.

[OilKiller]

Yes, it is a foreclosure. Yes, a bankruptcy includes court judgements.

Well, then you are just guessing like me...anyone else?

[VladtheImpaler]

You have to be clearer as to what this is. Did you fail to make mortgage payments? Or is this a judgment with respect to another debt? This is decisive and will tell us what your options are...

EDIT: OK, if it's a foreclosure, the bank will take your house. The process usually takes about 6 months. Are you under water - i.e. is the value of the mortgage > value of the house?

[Bill Bumface]

Nothing useful to add except it sucks to hear about your situation, and good on you for actually planning to repay your debt instead of trying to find the quickest way to default like everyone else in the world who is doing their best to take everyone down with them.

[Handsome B. Wonderful]

Relying on random people on the internet for legal advice is a bad idea, suck it up and get a lawyer.

[burn_this_city]

Originally Posted by Handsome B. Wonderful

Relying on random people on the internet for legal advice is a bad idea, suck it up and get a lawyer.

Theres plenty of known lawyers on here. I doubt he'll be taking any advice from Joe Random Internet Poster. Besides, sounds like he can't really afford additional expenses at this time.

[Hockeyguy15]

Originally Posted by Handsome B. Wonderful

Relying on random people on the internet for legal advice is a bad idea, suck it up and get a lawyer.

Judging by your attitude any advice from you is probably bad advice.

[OilKiller]

Originally Posted by VladtheImpaler

EDIT: OK, if it's a foreclosure, the bank will take your house. The process usually takes about 6 months. Are you under water - i.e. is the value of the mortgage > value of the house?

Yeah, a trustee I was talking to said it would be about a year. He was off by about 7 months...

I went to court yesterday and got 60 more days before we have to move. Yes, the amount owing is after the house is valued, etc. Like I said, under 80k.

I guess I'm not sure why all that matters. A judgement against me for a certain amount of money is just that isn't it? Why does it matter what happened before the judgement. I just really would like to know how they pursue the money owing from the judgement.

[Daradon]

Originally Posted by Handsome B. Wonderful

Relying on random people on the internet for legal advice is a bad idea, suck it up and get a lawyer.

Welcome to the site.

Going into this thread I was actually going to say, 'shiznit, the lawyers on this site must make a killing,' as there are several lawyers and money managers on this site who do get business from it.

Now you can B. more Wonderful.

[corporatejay]

Originally Posted by OilKiller

Yeah, a trustee I was talking to said it would be about a year. He was off by about 7 months...

I went to court yesterday and got 60 more days before we have to move. Yes, the amount owing is after the house is valued, etc. Like I said, under 80k.

I guess I'm not sure why all that matters. A judgement against me for a certain amount of money is just that isn't it? Why does it matter what happened before the judgement. I just really would like to know how they pursue the money owing from the judgement.

Because while a judgment might be a judgment, the facts surrounding how you got here can provide you with different options on how to deal with your situation.

This is why giving advice on the internet is tough, because really, all issues are different and there are hardly any black and white answers.

[Uncarved]

As far as i know a lot of times the Morgage compnay won't come after you for the extra 80K. If they do there could be a much higher chance of you filling for Bankruptcy and then they get nothing and end up eating all their legal fees because of it. Now this would be an exception if you owned multiple houses, or had enough to cover the $80,000 in assets that you owned. I think after the forcloser that they have up to 2 years to file a claim against you to reap the benifits.

[OilKiller]

Originally Posted by corporatejay

Because while a judgment might be a judgment, the facts surrounding how you got here can provide you with different options on how to deal with your situation.

This is why giving advice on the internet is tough, because really, all issues are different and there are hardly any black and white answers.

Fair enough...Hey, I'm not a lawyer...was just curious why it would make any difference. I would have thought a judgement is a judgement, regardless of how it got there.

Originally Posted by Uncarved

As far as i know a lot of times the Morgage compnay won't come after you for the extra 80K. If they do there could be a much higher chance of you filling for Bankruptcy and then they get nothing and end up eating all their legal fees because of it. Now this would be an exception if you owned multiple houses, or had enough to cover the $80,000 in assets that you owned. I think after the forcloser that they have up to 2 years to file a claim against you to reap the benifits.

But, if they are worried about someone filing for bankruptcy and losing all the money, then don't they care about the money in the first place? Wouldn't they come after me to get it? I guess I just don't understand the reasoning here.

[VladtheImpaler]

Just so we are clear, foreclosure is not my area of practice - hopefully, someone (Trout, Fred?) knows more about it and will weigh in...
I need a clear picture here - what is the approx value of your home? How much (in total) is owing on your mortgage? Is the $80K the difference between the two or is that simply the balance owing + court costs?

[OilKiller]

Originally Posted by VladtheImpaler

I need a clear picture here - what is the approx value of your home? How much (in total) is owing on your mortgage? Is the $80K the difference between the two or is that simply the balance owing + court costs?

The 80k is the difference in what is owing on the mortgage plus court costs, after they valued the home at a certain amount and agreed to pay that amount.

[VladtheImpaler]

Originally Posted by OilKiller

The 80k is the difference in what is owing on the mortgage plus court costs, after they valued the home at a certain amount and agreed to pay that amount.

I assume the mortgage was insured through CMHC? I believe CMHC will pay out the bank the difference. You might want to call CMHC, explain your situation (without naming names) and find out how things work and what is going to happen...

[Uncarved]

They are trying to get as much money out of you in the first place by taking the house which would be the largest amount they can get back, by re-selling the house. As for the difference in the house they could potentially come after you for the remainder difference on the house ($80,000), but in a lot of cases they don't because they could potentially end up not getting as much back if they just left it at taking the house (due to lawyer fees and a potential banckruptcy). If they do decide to persue getting the difference for the house value vs. the morgage they have up to two years after to make a claim against you, and they may not file this right away after the forecloser.

[fredr123]

Because this is kind of related, I'll just throw this out there. Here is a list of all the types of judgments that will survive bankruptcy (i.e., bankruptcy will not wipe away there debts:

Debts not released by order of discharge

178. (1) An order of discharge does not release the bankrupt from
(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;
(a.1) any award of damages by a court in civil proceedings in respect of
(i) bodily harm intentionally inflicted, or sexual assault, or
(ii) wrongful death resulting therefrom;
(b) any debt or liability for alimony or alimentary pension;
(c) any debt or liability arising under a judicial decision establishing affiliation or respecting support or maintenance, or under an agreement for maintenance and support of a spouse, former spouse, former common-law partner or child living apart from the bankrupt;
(d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others;
(e) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim;
(f) liability for the dividend that a creditor would have been entitled to receive on any provable claim not disclosed to the trustee, unless the creditor had notice or knowledge of the bankruptcy and failed to take reasonable action to prove his claim;
(g) any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred
(i) before the date on which the bankrupt ceased to be a full- or part-time student, as the case may be, under the applicable Act or enactment, or
(ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student; or
(h) any debt for interest owed in relation to an amount referred to in any of paragraphs (a) to (g).

Court may order non-application of subsection (1)

(1.1) At any time after five years after a bankrupt who has a debt referred to in paragraph (1)(g) ceases to be a full- or part-time student, as the case may be, under the applicable Act or enactment, the court may, on application, order that subsection (1) does not apply to the debt if the court is satisfied that
(a) the bankrupt has acted in good faith in connection with the bankrupt’s liabilities under the debt; and
(b) the bankrupt has and will continue to experience financial difficulty to such an extent that the bankrupt will be unable to pay the debt.

From the Bankruptcy and Insolvency Act: http://www.canlii.org/en/ca/laws/sta...985-c-b-3.html

[fredr123]

I will post some general comments about how this stuff some times works. The details have been given a lot of gloss and I would highly recommend anyone in a similar situation seek out legal advice of their own. Everyone's situation is different and this can have a dramatic impact on the advice you may receive.

From what you've said so far, it sounds like the lender has commenced foreclosure proceedings and that there is little to no equity in your home at this time (i.e., you owe more on the mortgage than what the house is worth). I'm guessing the 60 days you were given to move was probably the redemption period set by the Master in Chambers. Normally, the law in Alberta gives you 6 months to redeem your mortgage once the lender obtains the first order (an Order Nisi). Redeeming basically means you find a way to pay off what is owed. That period can be reduced for a number of reasons, the most common being that there is no equity in the home.

Because you have a figure in mind, it sounds like the lender has already provided their evidence as to the value of the home contained in their Affidavit of Value. This will always contain an appraisal done by a real estate appraiser. Often times it is merely an external valuation based on comparable properties and can, as a result, under estimate the value of the property. There is often an opportunity for a person in your position to hire his own appraiser and do a more thorough appraisal that results in a higher value. If that is the case, and you are able to convince the court that a value different from that provided by the lender should be used, you may be able to reduce the value of the judgment against you. Of course, there are costs and fees involved in fighting the value so you have to weigh the potential benefits of reducing the judgment against the costs you will incur in that battle.

The end result, however, will be that the court sets an amount outstanding on your mortgage. The court will also set the value of the home and allow it to be sold, usually directly to the lender. The value of the home is then credited to the amount outstanding on the mortgage. What's left owing, if anything, is the deficiency and a deficiency judgment against you will be ordered.

If you have a conventional mortgage (i.e., it was not necessary to get insurance through CMHC or Genworth) then the lender is not allowed to get a deficiency judgment. They will eat the shortfall. There usually isn't a shortfall with conventional mortgages because the lender requires a certain amount for a downpayment ensuring some equity in the property. If it is a non-conventional high-ratio mortgage you will be personally liable for the deficiency judgment.

Once a judgment is obtained, a writ of enforcement will be obtained. With the writ of enforcement, the judgment creditor (lender) can take a variety of steps to collect the judgment. The writ will be registered at the Personal Property Registry so that anyone who searches your name there will be aware of the outstanding judgment. They can also use the PPR to register their judgment against the title to any serial numbered or other goods that they know you own. This is like putting a lien on that property. If you had a truck and they had sufficient knowledge about it, they could register their writ at PPR on the truck and you would not legally be able to sell the truck without dealing first with that writ. Usually that means the proceeds of the sale would go to the writ holder.

The judgment creditor could serve you with a report and require you to fill out a statutory declaration about your financial situation including all other outstanding debts, your bank account information, your assets, etc. Failure to fill out that form could result in the lender getting an order declaring you in contempt of court. Punishment for contempt of court includes fines and in some cases jail time.

In lieu of the report, the judgment creditor could serve you with an appointment to attend in front of their lawyer to be questioned on your financial situation. You would be obligated to answer under oath the kinds of questions you would face on the form noted above. This is how the judgment creditor can get information about you and your assets for collection purposes.

Other avenues are available under the Civil Enforcement Act for collecting outstanding judgments. A garnishee summons could be issued to your bank which requires the bank to pay the amounts in your account in to court. The court will then notify you and all the other interested parties (usually those that have a writ registered at the PPR) of how they propose to distribute those funds. There is a formula for figuring this stuff out in the Civil Enforcement Act.

Similarly to the above, a garnishee summons could be served on your employer or anyone who owes you money requiring them to pay those funds into court to be later distributed.

The judgment creditor could use the writ of enforcement to issue a warrant and hire a civil enforcement agency to attend anywhere you have personal property and seize it for the purpose of paying off the debt. The Civil Enforcement Act governs this process and exempts some of your property from seizure. Basically they won't be allowed to take all your clothes, food, and tools of your trade but anything in excess can be taken. Once seized, it can be sold at auction and the funds would be used to satisfy the debt.

All that being said, a lot of these things are pretty extreme and there are not a lot of instances where I've been involved in seizing people's personal property to satisfy a judgment. The writ of enforcement can be renewed almost in perpetuity so in a lot of cases they lender will sit tight and wait for you to become gainfully employed or try to sell your property before they are able to collect. In the mean time, they might sell your judgment to a collections agency or, if the mortgage is insured by CMHC or Genworth, they could assign it to them so that they can try to collect.

A deficiency judgment can be wiped out through bankruptcy but certain other debts and judgments will survive. If there is a declaration of fraud associated with the judgment (which sometimes happens when there is mortgage fraud involved) that judgment will survive. You should talk to a trustee in bankruptcy to assess your options. They are usually free to consult and will be able to give you proper information about how bankruptcy would affect your specific situation.