cmhc and recovery
March 30th, 2007 by Questions
my wife and i had our home foreclosed on back in 2001. The sale price less commission was less than the outstanding mortgage by about $5000. It was a CMHC insured mortgage. This, among other things led to personal bankruptcy in 2003. We were discharged in 2004. The trustee filed our income returns for the years 2002 and 2003. We were were granted absolute discharges in 2004. My wife and I filed income tax returns for 2004, 2005 – no problems. CMHC has now grabbed our tax returns for 2006 in the amount of about $2000. This took us by surprise. What happens now? I would assume we owe CMHC the balance, although they have yet to communicate anything to us. And why would it take 5 full years for them to come after us? What are our options to pay this out? We’re stilling recovering financially from the bankruptcy and haven’t established sufficient credit to pay off CMHC in a lump sum. What other charges will CMHC be adding over and above the mortgage deficiency (arrears, interest, legal?) and how aggressive is the recovery?
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March 30, 2007 at 5:48 pm, A licensed trustee said:
You do not owe CMHC the balance – the debt would have been discharged by your bankruptcy, but CMHC is not a particularly efficient organization and iot is likely they have not recorded the fact that you have filed and been discharged from bankruptcy.
You have a couple of options:
1) send CMHC copies of your bankruptcy documents, including your Certificate of Discharge and request they repay you the money they have taken improperly;
2) contact your trustee and ask them to assist you – understand that your trustee will expect to be paid (and they won’t be inexpensive); or
3) do nothing and let CMHC keep taking your refunds until they have enought to satisfy the debt