Mortgage Trouble

If the mortgage has become the problem, start here: what happens next, what each choice costs, and where a proposal or a bankruptcy fits and where it does not.

Where you are: the start of the road. Find your stage below; each guide hands you to the next.

Behind on your mortgage, or about to be? Start here.

I am Paul Franchi, a Licensed Insolvency Trustee in Ontario, and a lawyer by training. By the time most mortgage files reach my desk the house is already sold and what is left is a letter saying how much the person still owes. This centre is written for the earlier moment, when there is still something to decide: a renewal that came back at a number you cannot carry, a missed payment, a Notice of Sale in the mail, a second property that no longer pays for itself, a home that costs six thousand a month to keep. Every page here tells you what happens next, what each choice really costs, and where a consumer proposal or a bankruptcy fits and where it does not.

Who these remedies are for. Everything in this centre about a consumer proposal or a bankruptcy applies to a person who is genuinely insolvent under the Bankruptcy and Insolvency Act: someone who cannot pay their debts as they come due, or who owns less than they owe. That is not a formality. It is the first thing I assess, and the law requires me to. If you are not insolvent, these are not your remedies, and arranging your affairs to look insolvent when you are not is the worst thing you can do: the Act lets a trustee reverse payments and transfers made before a filing, the Official Receiver examines a bankrupt under oath about the causes of the bankruptcy and what happened to the property, and a discharge can be opposed on exactly those facts. I am bound by my Code not to assist anyone down that road, and I will not.

Which rung are you on?

Six levels of leverage shape what your options are and what they cost: how much equity sits in the home you live in, whether a second property’s mortgage pushes you over the consumer proposal’s ceiling, and, the one that changes everything, whether one lender holds a mortgage over both of your properties at once. The ladder is set out in full on House poor at six thousand dollars a month. Find your rung there, and the page that is yours follows.

The guides, in the order to read them

Power of Sale in Ontario.

The anchor. What power of sale is, the Notice of Sale and the clock the law sets, how private and MIC lenders use it, whether filing pauses it, and the five questions that decide what you owe at the end. Read the guide

Behind on your mortgage in Ontario: what happens next, and what you can do at each stage.

The road from the first missed payment to the day the house is sold and past it, with the realistic moves and their true cost at every step. Read the guide

My mortgage renewal was denied, or I can’t afford the new payment.

Why a lender says no, the renewal wall in numbers, the private-lender trap, and the reframe most people never hear: the mortgage is usually the debt you can keep. Read the guide

Selling your house when you have too much debt: before, during, or after a proposal.

The decision page. Can you sell during a proposal, should you sell at all, and the mistakes made before filing that cannot be undone. Read the guide

The condo that no longer pays for itself.

For the owner of a second property that is underwater and bleeding cash: what waiting costs, the four ways out, the tenant, the shortfall, and the lender who holds both titles. Read the guide

House poor at six thousand dollars a month.

The honest arithmetic of keeping a home you cannot afford, the psychology of why we stay, and the ladder itself. Read the guide

The lender’s bill.

After the sale: how to check what a power of sale really cost you, have the lender’s costs assessed without a court, and what to do about a shortfall that turns out to be real. Read the guide

For mortgage brokers: when a client’s problem stops being a lending problem.

Practical guides, worksheets and template letters to help mortgage brokers prepare the next client conversation. Read the guide

Each page says at the top where you are on the road, and each one hands you to the next.

Broker Closing-Risk Toolkit

Practical guides, worksheets and template letters to help mortgage brokers prepare the next client conversation.

If you intend to use them professionally, you must first obtain approval from your own internal compliance department and make any changes it requires.

Open the broker toolkit

When the problem turns out to be the other debt

Rungs one and two of the ladder describe most households in trouble: the mortgage is fine, and everything else is not. For them the answer lives across the hall, in the Consumer Proposal Resource Centre, where every consumer proposal question is answered one guide at a time, and the Consumer Proposal Calculator puts your own numbers on the page. This centre sends you there at every point where a proposal is the door, and that one sends you here when the trouble is the mortgage itself.

Can’t find your answer here?

This site is built to answer these questions properly, and most of the time it will. If yours is not here, send it to me. I read them myself, and I answer them personally.

If what you want is to understand your next steps, I can help you with that directly in Ontario. The first thing I will do is assess whether you are insolvent under the Act; if you are not, I will say so. The other Licensed Insolvency Trustees I work with can assist across the rest of Canada.

Paul Franchi, Licensed Insolvency Trustee

Arrange a conversation

Speak with Paul: 647-492-9283

The analysis behind these pages

The guides in this centre draw on the practitioner papers this site publishes, which carry the section numbers and the cases: the mortgage-continuity paper and the Division 1 papers, as they are signed and released. Every figure on these pages carries its source and its date. The pages are general information about Ontario law and not advice about your situation; the sections above tell you who to ask.