Do we just walk away from both mortgages?
I have two homes in Saskatchewan one we were in the process of building to live in and we were going to sell the other. We had a mortgage on the first and the second one we had a loan to build based on the value of the one we lived in. Unfortunately, personal circumstances required us to leave the country and we had rented the one we lived in and tried to sell the one under construction. Our renters are moving out and we cannot afford to pay the bills without them. We are behind in the house that is being built and haven’t found a buyer, and the other one isn’t selling.
My question. We no longer live in Canada, with no plans to return. Do we just walk away from both mortgages? At this point, we wouldn’t make any profit if we sold anyway.
Do we then let them foreclose and try to sell and claim bankruptcy on the shortfall?
If we no longer live there what can happen if I just tell the bank to take the houses? Or should I not tell them and just wait till they no longer receive payments and do it themselves?
What else can u tell me?
If you are quite sure that you are not returning to Canada then walking away from the properties and allowing the bank to take over is your only option at this point. Usually with a Power of Sale proceeding you will be looking at a shortfall that is higher than if you were to be in control of the sale yourselves. A shortfall from a power of sale can be included in a personal bankruptcy filing.
The Office of the Superintendent of Bankruptcy outlines some basic criteria that must be met in order to file for bankruptcy. Even if you do not currently reside in Canada and do not intend to return you may still be eligible to file a personal bankruptcy as you own property in Canada. Your trustee will work with the government to arrange to have your financial assessment completed by telephone. When it is time to sign the documents you can attend the Canadian Embassy or another suitable agency as deemed fit by the government so that your signature can be witnessed by an appropriate party. If you are residing in a country where it would be difficult to attend a meeting at the Canadian embassy then it may be possible to appoint a Power of Attorney that can sign for you here in Canada.
Making the decision to file for bankruptcy now will allow your trustee to deal with the banks during the power of sale proceedings and you will truly be able to walk away with only the duties of your bankruptcy to complete.