The Bank Is Threatening Foreclosure on My Home
When a bank or other institution lends you money to buy a home, they take a mortgage to secure payment. A mortgage is registered against the title of your home, and if you don’t make the required payments, the bank may be able to foreclose. This will usually mean you have to pay them the entire amount owing on the mortgage, though sometimes you can arrange to catch up your payments. If you cannot make some kind of arrangement, you risk your house being sold to pay the mortgage. The usual first step in a foreclosure is a demand letter from the lender or its lawyer, saying that you are in arrears (behind) in your payments and demanding that you bring them up to date.
- Do not ignore the demand letter. If at all possible, you should get legal advice right away. Then, try to negotiate with the lender to see if you can arrange manageable repayment terms.
- If you can’t work things out with the lender, the lender will probably start a court action to foreclose on your mortgage. This usually happens after you’ve missed three months of payments. But it can happen sooner. They will serve on you (give you in person) a BC Supreme Court petition. The petition will ask the court to confirm the amount you owe and set a time period — usually six months, but sometimes shorter — during which you can redeem, or pay off the mortgage. At some point in the foreclosure process, the lender may also ask for an order that your home be sold, and for an order that the lender will have conduct (control) of the sale.
- If you are served with a foreclosure petition, it is important to get legal help. If you are self-representing, you must file a response document within 21 days after the date the petition was served on you, and deliver it to all parties along with any affidavits (sworn written statements) telling your side of the story.
Supreme Court forms can be accessed through the "Laws, Cases & Rules" page on Clicklaw; click on "BC Supreme Court Civil Forms." For information on what should go into an affidavit, see the publication "Can't Pay Your Mortgage? What You Can Do If You're Facing Foreclosure."
What happens next
The court will set a date for a hearing of the petition. The judge will read the affidavits and other materials and listen to the lender’s lawyer and to you. Generally, if you are in default, the best you can hope for is enough time to arrange for other financing to pay out the lender or at least to come up with enough to catch up your payments. You can also use that time to try to sell the house, up to the time the lender gets an order for them to have conduct of sale.
Where to get help
See the Resource List for a list of helpful resources. Your best bets are:
- Credit Counselling Society of BC.
- Access Pro Bono, Lawyer Referral Service, and private bar lawyers.
- The Legal Services Society publication "Can't Pay Your Mortgage? What You Can Do If You're Facing Foreclosure."
- The Clicklaw common question "I've missed a few mortgage payments and am facing foreclosure" for a few more resources on foreclosure.
Before meeting with a lawyer or advocate, complete the form Preparing for Your Interview included in this Guide. Make sure you bring copies of all documents relating to your case.
|This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Drew Jackson, March 2017.|
|Legal Help for British Columbians © Cliff Thorstenson and Courthouse Libraries BC is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.5 Canada Licence.|
The conditional transfer of the title to real property by an owner to another person in return for money given by that person as a loan, while retaining possession of the property. The party to whom title is given, the "mortgagee," usually a bank, is allowed to register the title of the property in their name if the person taking the loan, the "mortgagor," fails to make the required payments. See "encumbrance" and "real property."
In law, a document demonstrating ownership of a thing. See "ownership."
A letter describing a legal claim sent to the person against whom the claim might be made, offering to settle the claim without the necessity of legal action on terms set out in the letter. Demand letters are usually issued before court proceedings have commenced in order to settle a potential claim without the need for litigation.
A person licensed to practice law in a particular jurisdiction. See "barrister and solicitor."
A court proceeding in which one party sues another for a specific remedy or relief, also called a "lawsuit" or a "case." An action for divorce, for example, is a court proceeding in which the claimant sues the respondent for the relief of a divorce order.
A mandatory direction of the court, binding and enforceable upon the parties to a court proceeding. An "interim order" is a temporary order made following the hearing of an interim application. A "final order" is a permanent order, made following the trial of the court proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to appeal. See "appeal," "consent order," "decision" and "declaration."
An agreement to transfer the ownership of property from one person to another in exchange for the reciprocal transfer of something else, usually money. See "agreement."
A legal document in which a person provides evidence of certain facts and events in writing, as if the evidence was given orally in court. Affidavits must be notarized by a lawyer or notary public who takes the oath or affirmation of the person making the affidavit to confirm the truth of the affidavit. Affidavits are used as evidence, just as if the deponent, the person making the affidavit, had made the statements as a witness. See "deponent" and "witness."
In law, any proceeding before a judicial official to determine questions of law and questions of fact, including the hearing of an application and the hearing of a trial. See "decision" and "evidence."
A person appointed by the federal or provincial government to manage and decide court proceedings in an impartial manner, independent of influence by the parties, the government or agents of the government. The decisions of a judge are binding upon the parties to the proceeding, subject to appeal.
In law, failing to do something which is either optional or mandatory, such as failing to respond to an application or to a claim within the time limits set out in the rules of court. See "default judgment. "
A lawyer or a person other than a lawyer who helps clients with legal issues; to argue a position on behalf of a client.
In law, a court proceeding; a lawsuit; an action; a cause of action; a claim. Also the historic decisions of the court. See "action," "case law, " "court proceeding," and "precedent."