If the judgment was renewed every so many years, they can still come after you. If you’re into your judgment thirteen years, you only have seven before the judgment expires. The judgments are only good for twenty years and you’re done. The good thing is that this judgment should not be reporting in your credit file. I would check the local court house or the office that keeps the judgments on file and see if it’s still active. If it’s still active they still can have your wages garnished if they know where you work and also still attach the judgment against any assets you have. Do you have a source of income or any assets like a home or a vehicle worth over $3000.00? If you are working and they are not aware were you working at, I would tell them you’re unemployed. Are you interested in settling this matter and was the balance $60,000?

I defaulted on a mortgage in Ontario in 1995.
A Judgment was issued that same year, but I received nothing or heard anything until the spring of 2008 from a collection agency.
the original monies owing were appx 5o k now they want that and another 60 k in interest.
My income tax refunds are now being taken.
Does anyone know if this can be done after 13 years of inactivity ?
Any help would be appreciated.

Hi Raymond,

It sounds like you know your stuff. I am in Nova Scotia and the process here if you default on your mortgage is called a judicial sale or Mortgage Forclosure. This process is longer then the power of sale and more costly to the lender. I wonder when the process is over, and I know for a fact there is going to be a short fall. The lender is going to put in a claim to CMHC for the shortfall. Is CMHC going to come after me for the money since they paid it out, if so do they send the debt to a collection agency or do they have their own recovery dept.?

Cheers

With respect to limitations in Ontario, there was the old Limitations Act which had a large number of different limitation periods covering different types of actions. This was replaced by the Ontario Limitations Act of 2002 which came into effect on Jan.1, 2004. However, this new Act which has a general limitation period of 2 years for most types of unsecured debt, specifically excludes many (but not all) types of claims that deal with real [estate] property. Part 1 of the old Ontario Limitations Act that dealt with real property was left unchanged and simply renamed the Real Property Limitations Act (RPLA). Under the Act, Section 17(1) allows the mortgager (the lender) to come after the mortgagee for 6 years of unpaid interest. Nonetheless, there are other provisions in which the 2 year rule may apply. This is because any mortgage convenant not specifically mentioned in the RPLA would fall under the 2 year rule of the general Ontario Limitations Act of 2002.

These distinctions are moot however, since foreclosure (presumably under Power of Sale) occurred almost immediately after default in 2002. You mentioned a shortfall of 36K, as the house sold for 219k and was bought for 255K. I assume the difference includes all the associated outstanding interest, selling, tax and appraisal costs. Unfortunately, the borrower is liable for any shortfall on a default as explained by CHMC . Being a secured loan under a Power of Sale, the lender doesn't need to go to court to obtain judgement and repossess his security.

Under a Power of Sale, the lender has to obtain 2 independent property appraisals to assure the Financial Services Commission that the home was sold at its true market value and not hurredly at some distressed price. Otherwise, an unscrupulous lender could take advantage of a distressed borrower in order to obtain quick disposal on an asset.

I've also seen cases where the lender has sued the real estate appraiser who did the initial appraisal for the mortgage when the appraisal they gave was too high and the lender suffered a loss as a result. That's why real estate appraisers have to carry liability insurance. Mine cost me more than my car insuurance. I mention this because it's not clear why the property value fell so much in one year when almost everywhere else it rose. It's impossible to say why your ex hasn't been sued. For that amount, the lender would have to launch an action in Ontario Divisiional Cout (one of 3 branches of Ontario Superior Court). For amounts between 10K and 50K, it involves what's called the simplified procedure (still not all that simple or inexpensive.) Perhaps your boyfriend didn't have significant assets at the time and it wasn't persued for that reason. In any event, to garnish his wages, they would have had to have taken him to court to make up the shortfall. Since I don't see the subject of shortfalls mentioned anywhere in the RLPA and it happened in 2002, I assume that a grandfathered 6 year period for filing an action on it would be applicable. Sorry, I can't be more definite but even a lot of lawyers are uncertain about the limitation periods of particular actions not dealt with in the RPLA. Not too sure about the income tax thing. I'll have to check next week. Why wouldn't your boyfriend check with the CRA or the Ontario Divisional Court to see if there was a default judgement obtained against him? It just takes a phone call.

Another aspect mentioned to me a while ago by a prominent real estate lawyer was the notion of "conveyance of convenience" as applied to the transfer of title in deeds. This came up in probating a will. A father was contesting the title to his property which he had transferred to his son for legal conveniences. The son was threatening to evict the father, even though the house was built and paid for solely by the father; the son was only the nominal legal owner and had never lived there. The lawyer claimed he was going to dispute the son's right to ownership on behalf of the father in court. I don't know how it all turned out - if it did at all - but there seems to be a certain parallel, albeit a reverse one to your case.

Anyhow, in complex matters like this, a legal opinion must be obtained through an experienced real estate lawyer who knows all the minutiae of the case.

Ray

I am in Ontario. And does the 6 year SOL rule apply to this?

Which province are you in? Four provinces (including Ontario) operate under Power of Sale rules, while the others use Judicial Sale rules which involve considerable court action. And among the provinces there are variations in their applications of these rules?

Ray

hey rosa123...

Raymond!!.. where have you been?!!

It was a little early when I replied this morning..
Zeller's won't put it on your credit report at this point, and neither will the collection agency.

I'll agree with Raymond on this.. I don't think that the collection agency has any legal footing in this matter.. Just my opinion though...

Another probelm... Back in 2001, the parents of my very naive boyfriend bought a house and put it in his name. he never lived there. One year later there was a foreclosure on the house. The original Mortgage was for 255k and I found out that it was sold for 219k. There is now a MIF deficiency judgement on his name. He has never been directly contacted by them but his income tax returns are being taken each year. Does this mean that there was a court ordered Judgement and can they garnish his wages? Would he be responsible for the 36k? Any advice on this??

No they can't if it's been more than six years from the date of last payment or WRITTEN ACKNOWLEDGEMENT of the account. You can't revive or reactivate unsecured consumer debts this way. The previous payments you made in 2004 were LEGALLY unnecessary and the $500.00 settlement offer, if made after the six year period, is not legally binding since, surely, it would be only a gratuitous offer by then.

Credit reporting policies of CRA's have nothing to do with litigation recovery rights.

Thanks, but can they still take me to court??