Many people come to us looking for help with very little understanding of the foreclosure process. It is a traumatizing experience to potentially lose the roof over your head so the primary goal of our company is to help build solutions to prevent this unfortunate outcome.
How foreclosures work in Alberta
In Alberta, foreclosure is governed by the Law of Property Act. Usually, once 2 to 3 months of payments have been missed the lending bank will submit a file to the foreclosure lawyer of their choosing. The first thing that lawyer will do is issue a Demand Letter to the borrower (you). This letter acts as a notification that you are in default of the terms of their mortgage. The Demand Letter usually gives 10 days to correct the problem. If the borrower is able to pay the outstanding arrears in full, plus a nominal legal cost, the foreclosure action is avoided. If payment is not made by the date specified, the lawyer is open to file a Statement of Claim with the Court. The Statement of Claim is the official beginning of a lawsuit by the Plaintiff (bank) against the Defendant (borrower).
Statement of Claim
The Statement of Claim outlays what breach has been committed under the terms of the mortgage and it also outlays what remedy the bank is looking for. Under Alberta law, it provides a 20 day grace period for the defendant to file a Statement of Defense.
After the Statement of Claim has been served, you will have a number of options on how to proceed. You may elect to sell your house, to pay up the arrears in full immediately, or to negotiate a payment plan with the lender, you may choose to consent to an Order for Sale to Plaintiff or an Order for Foreclosure in which case the lender takes over the property. All of these options have their advantages and their distinct drawbacks. Proper guidance is a must as decisions made now can greatly affect the ultimate outcome.
Understanding the Statement of Defence
Within a Statement of Defence, a borrower needs to provide legitimate reasons as to why the lender should not proceed in their action. It is important to understand that the law is not always compassionate to personal afflictions, regardless of how difficult or out of your hands they really were (ie: job loss, health issues, relationship breakdowns ect.). The law is used to interpret the facts based on the agreements made. Regarding mortgages, the fact is that you borrowed money and it has not been paid back as stipulated in the agreements signed.
The reality is that filing a Statement of Defense based on personal reasons of to why the mortgage wasn’t paid as stipulated is rarely a helpful step to a homeowner in foreclosure. In foreclosures, a Statement of Defence rarely proves to be successful, unless it involves cases where financial fraud against the lender can be proven. Again, this is a very rare occurrence.
What to do next
For further information and details about the foreclosure process in Alberta, you can read more about it here. However, if you are currently facing a foreclosure situation and have questions about what your next steps should be, your next best step would be to get professional help. Please contact us right away to get personalized advice and discover the options available to you. By not taking the right actions at the right time, you can ultimately lose your home to foreclosure and impact your credit score. Our foreclosure specialists will be happy to discuss your situation and guide you through the best way to proceed.
With years of experience, first-hand knowledge, and trusted professional resources, we have a number of proven solutions available to help you make the right choices in order to stop foreclosure proceedings, help you stay in your home, keep your payments reasonable and get you back on track financially.
