Foreclosure in Alberta – Know your Options
By Jeff Wreschner
Foreclosure law is changing quickly in Alberta. Now more than ever, it is very important to have up to date information on your rights and options.
Technically speaking, a homeowner is “in default” once they fail to pay a mortgage payment at the scheduled time. While the lender is entitled to start foreclosure proceedings right away, it is more likely to occur after a series of missed payments.
If you have defaulted on your mortgage, one option to avoid potential foreclosure is to provide the lender with a payment plan outlining the dates and amounts you commit to pay in order to get the payments back on track. The earlier this happens in the process the better, as it keeps legal costs down, and demonstrates to the lender your ability to repay your debt.
You can also stay in the home until the court tells you to leave. If you can demonstrate special circumstances to the Court, such as you now have a job that will allow you to make payments again, the Court may extend the time you have to repay your debt or leave the property, particularly if there is considerable equity in the home. On the other hand, the Court could shorten this time period if the property has been abandoned or if there is no equity in the property. In situations where there is a court ordered sale of the home and there is equity left from the sale proceeds after all lenders have been paid, the homeowner can apply to court to get the leftover money back.
It may not be easy, but it is important to cooperate with the lender during the process. In Alberta, all homes must be sold at market value. So, the more the homeowner can do to maximize the sales price of the home, the more equity could be leftover for the homeowner once the mortgage debt and associated fees have been paid out.
Foreclosure can happen to anyone. Sometimes a homeowner experiences job loss or health issues and are simply unable to continue making payments. In Alberta, it used to take close to a year for a foreclosure proceeding to be completed. With recent changes from the Courts, the entire process can be completed in a few months time.
If you have received a Statement of Claim initiating the foreclosure process, you should consult a lawyer immediately to ensure you understand the process and options available to you.