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If I am unable to pay the mortgage on my home, may I simply give it back to the Bank?

If you stop paying the mortgage on your home, you will be in default of your obligations. The financial institution will then have two choices :

  1. To sell the building under judicial authority: In such a case, you will be responsible for any losses that the Bank may suffer as a result of the sale.
  2. To sell the building by “Prise en paiement” or “Giving in payment” : In such a case, it will erase your debt to the financial institution. This second choice is always more advantageous, because you are released from any obligation to your financial institution.

The intention of the Bank to proceed with either of these options must be indicated in the notice that will delivered by a bailiff and which is entitled “Préavis d’exercice d’un droit hypothécaire” / “Notice of exercise of a right of mortgage.” The notice gives details of the default and gives you sixty (60) days to remedy the situation, failing which, the Bank or mortgage holder may submit an application to the Court in order to avail itself of the option chosen.

Please note, that in either case, due the default of your obligations, your credit rating will be R-9.