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Power of sale

Good morning. I have a question please. I have a friend who`s house is going under power of sale. There is no equity in the house, and i belive the bank will probably be under 50-60 thousand after all the expenses. I understanad that the bank is insured by CHMC and will get that money from them, but what happens after? Will CHMC come after him for the money owed? Can CHMC harnish his wages or taxes? Thank you very much. Bill

Posted from: Ontario

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One Response to “Power of sale”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

You are correct that the bank is insured by CMHC against loss. So CMHC is there to protect the bank’s interest, but they will then hold the debt and will turn to your friend to collect. CMHC will be able to employ the standard collection powers that any creditor has (i.e. garnishment, asset seizure etc.).

Now this shortfall can be dealt with by the filing of a bankruptcy or consumer proposal, but you are best to contact a local trustee to discuss how these can prevent your creditors from garnisheeing of wages or some of their other collection powers.