You are in default, and you have received a 60-day notice – what can you do?

There are many ups and downs in life that can impact your financial situation, these include, and are not limited to: job loss, health problems, divorce, economic downturns and/or natural disasters… you just never know what can happen that could disrupt your financial situation. If you are impacted by any of these situations, and unexpectedly you have trouble making your mortgage payments, you might end up receiving a 60-day notice. Don’t panic, there’s a way out. 

In Quebec, the 60-day mortgage default rules are part of the legal process that lenders must follow if a borrower defaults on their mortgage payments. If a borrower is more than 60 days late on their mortgage payments, the lender can initiate a legal process known as "demande en justice pour le recouvrement de biens hypothéqués" (action to recover mortgaged property).

By issuing a notice, which is registered with the land rights office, a creditor is indicating to you that they wish to assert their guarantee, and by which way they intend to do so, by payment or by sale. The notice also explains the reason that gave rise to its issue as well as the means of remedying the situation before the court judgment.

The legal process involves several steps:

• The lender must send a notice of default to you by registered mail or by bailiff giving you at least 60 days to pay the outstanding amount.
• If you do not pay the amount owed within the 60-day period, the lender can apply to the court for an order to sell the property.
• The court will then issue an order to sell the property.
• The proceeds of the sale are first used to pay off the outstanding mortgage debt, including any interest, penalties, and fees.
• If there is any money left over after paying off the mortgage debt, it will be given to you.

It is important to note that the 60-day default rule in Quebec is designed to protect both you and the lender. You have time to rectify the default, and the lender can initiate legal action to recover the mortgaged property if necessary.

Not all is lost, but you need to move quickly! It is important for you to take action as soon as possible if you receive a 60-day notice. Ignoring the notice or delaying action can reduce your options and make it more difficult to avoid foreclosure. 

First off, seek out the help of a mortgage broker, they know what your options are, such as:  

• Negotiating with the lender
• Refinancing your mortgage
• Lease buyback or rent to own
• Selling 
• Debt settlement 
• Private loan 

Ultimately, what you want to do is keep your house or at least salvage the balance of equity in it. If you find yourself in this situation, do not waste any time, and contact us immediately. We will do everything in our power to keep you and your family safe in your home. Call or email us now.