I met with a man in our Tillsonburg office who had been in a common-law relationship. There was a split and he left the house while she remained in the property as per their agreement. She was making the mortgage payments on the property and maintaining the house. After a while she could no longer afford the house and ResMor Trust seized the property in 2012 legally by Power of Sale. On March 4, 2015 he received a notice from CMHC (Central Mortgage and Housing Corporation) that they were pursuing him for $38,528.36 – the deficiency on the house after the sale by ResMor Trust.
What the man did not realize was that his ex-common-law spouse had filed a bankruptcy, therefore protecting herself from the debt. He was stunned that he owed CMHC $38,000, with all the accumulated fees and interest. He had no other debt and is now faced with a huge debt that couldn’t be ignored.
I advised him that the problem with leaving a place of residence that your name is attached to, is that you don’t know whether the mortgage payments are being made. He was still responsible for the mortgage.
Had he made efforts to ensure the mortgage was being paid? Perhaps he could have taken over control and tried to catch up on the payments. Then try selling the house himself to at least break even; avoiding having to file bankruptcy or a consumer proposal.
But it was too late to consider those options now. He couldn’t change the past and had to look at which option was best for him to deal with the large debt.