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Avoid Paying a Property Lien

How to Avoid Paying a Property Lien: Introduction to Strategically Removing Equity

For the purpose of this article, let’s assume a creditor has filed a statement of claim and is seeking judgment against you for $15,000. And you own a property worth $300,000 with a 1st mortgage of $200,000 owing. But you’re unemployed or in too high of debt to make a settlement on all of your debts.

So the creditor is about to get a judgment and you’re certain that they will want to lien your property (known as a writ).

How would somebody avoid having this happen to them?  Well, you may not be able to avoid the judgment or the lien on your property but you could minimize the amount a creditor could receive by strategically removing the equity from your property.

The only way a judgment is any good to a creditor is if they lien an asset (usually a house) or garnishee a wage if the ‘debtor’ is unwilling or unable to repay an outstanding debt.

Now, strategically removing equity is actually a term we just made up because we’ve only seen this done once. It’s super rare and WAY out of the box thinking to ensure a creditor can’t get priority on your small amount of equity if/when your house is ever sold.

So in the above example with a creditor seeking judgment and a writ on your property for $15k, your land title would show the 1st mortgage of $200k then a $15k judgment, both of which need to be removed from the title if/when you sell your home.

But what if between the time you were served a statement of claim and the creditor obtained a judgment, you had added a second mortgage on your land title? Well that would take priority over any writ that may be added to your property later.

You do NOT need to go to a normal lender and apply for a loan here, simply to add a second mortgage charge which could be done by an acquaintance lending you a nominal sum of money. Then down the road (like right before your house sells), extend that 2nd mortgage for the total amount of equity in the house so only 1st and 2nd mortgage are paid off from the sale.

Have a friend or family member lend you $1,000 – $5,000 as a 2nd mortgage against the property which will take a priority order ahead of any future charges that could be made against the title. If your ‘loan’ from the person is repaid over a certain term just simply ‘renew’ the loan with the family member or ‘extend’ the loan for up to the total value of equity in the property.

Hopefully we were clear here with the above concept. The point is that the 1st mortgage will always be there and needs to be repaid whenever the house is sold. The second mortgage through a lender/friend/family member ‘strategically removes the equity’ available to future creditors.

If you later renew the 2nd mortgage for $70,000 and the property is sold at some point for $300,000. The 1st mortgage, 2nd mortgage and relator/legal fee’s of the sale will take priority without funds left over to repay a judgment.

Disclaimer: The above article is for reference only and is not a suggestion on a way for people to handle a possible judgment. If you have been served a statement of claim, it is recommended that you seek legal counsel immediately… then go put a 2nd mortgage on your house so that a writ won’t take priority if you ever sell it….

Posted in Property Liens. Tagged with , , .

When to Avoid Filing for Bankruptcy

filing for bankruptcy

Keep driving straight

 

 

 

 

 

 

 

 

Avoid Filing for Bankruptcy in Canada

Since the most recent bankruptcy statistics show tens of thousands of Canadians filing for bankruptcy every year, we felt it necessary to share some insight into the reasons bankruptcy is such a poor option for many consumers.

First we’ll point out that we are not lawyers (nor do we pretend to be lawyers on the internet), so the advice in this article should not be construed as legal or financial advice but merely an opinion.

And it is our opinion that asking a bankruptcy trustee (who is paid if you file for bankruptcy), whether or not you should file for bankruptcy, isn’t really the best idea.

There is very little motive for a bankruptcy lawyer to advise a potential client not to use their services. If  a trustee makes $0 with an answer of ‘no’ and as much as $1200 with an answer of ‘yes,’ there should obviously be concern with the source of the information when asking ‘should I file for bankruptcy?’

If you believe that a lien on your property or a wage garnishee will be taken by a creditor or collection agency, then obviously bankruptcy is an option worth exploring. But if you have not been served a statement of claim or the agency is just threatening legal action, the benefits of bankruptcy are minimal.

Bankruptcy will not fix your credit once you’ve defaulted on your credit cards or loans. Regardless of ‘being able to reapply for credit after a bankruptcy discharge,’ financial institutions will not want to lend to a former bankrupt person any more than they would a person with bad credit.

You will very likely have to rebuild your credit rating using secured credit, regardless of being able to settle all of your debts, make payments or filing for bankruptcy. If angry and annoying bill collectors are the only reason you’re considering filing for bankruptcy, just harass the bill collectors back and get on with your life and rebuilding your credit.

Posted in Fighting Back.

Recovering Debts Through Property Liens

Recovering Debts Through Property Liens

Once a creditor obtains a judgment, any person owning property should expect a ‘writ’ to be applied on their land title within 7 – 30 days depending on the province and cities land title office.

The judgment creditor will send the request to the land title office to ensure the judgment receives priority if the house sells or title is transferred to another name.

 

 

 

 

 

 

The priority order for payouts upon sale of a property are:

Mortgages (1st, 2nd, 3rd — if applicable)

Builder Liens

Tax Liens

Judgments

Sometimes creditors with judgments will petition the courts to force sale a property when they have registered a lien. In order to do this, the creditor must obtain an appraisal (this can be done by drive-by, not entering your home) and add this to the application given to the courts requesting to for the sale of your property.

In Alberta, once an application for an ‘order nisi’ is completed the defendant has 6 months to repay the amount the judgment creditor is seeking or the property will be put up for sale.

Whereas in British Columbia and Ontario the order to force sale a property can take 12 months or more and cost thousands of dollars in legal fee’s for the creditors.

If the property is sold and their is a shortfall from the sale to payout the mortgages and liens, the judgment creditor could receive nothing. They can still attempt to recover the judgment, but will most likely consider it to be a ‘dry judgment’ once the asset sells.

 

Posted in Property Liens.

How to file a complaint against a collection agency

Filing Complaints Against Collection Agencies for Fun and Profit

Let’s get something clear here before we start calling the government offices about a rude bill collector. The Canadian government has no time for BS complaints. So if someone was rude to you, that’s not good enough to get any real damage done.

If a collector is breaking the law, calling you at work when you’ve told them not to, telling people about your debts or generally harassing you then use the tips below to maximize the potential damage that can be done to the agency.

1. You need the collectors name, time of calls and the agency name.

2. If this is a ‘stop calls to work’ complaint, depending on your province, you may have to show proof you asked them not to call you at work. Faxing them and saving a copy is always a good idea.

3. If they disclosed your debt or personal information, get ready for fireworks!! Because that is some BAD stuff they’re doing and it’s against the law.

Okay, now onto the fun stuff…WHO DO WE COMPLAIN TO DAMMIT?!?!

The Office of Consumer Affairs has the quick link info for all provincial offices that oversee collection agencies. Here are some of the most popular ones though that receive the most complaints in Canada.

Alberta

Service Alberta (1-877-427-4088 (toll-free in Alberta)) is the government watch dog for Collection Agencies ensuring they follow the rules of the ‘fair trade act.’ You can reach the Alberta collection agency complaint page here.

Service Alberta
Investigation Services – North
3rd Floor, Commerce Place
10155 – 102 Street
Edmonton AB T5J 4L4
Fax: 780-422-9106
1-877-427-4088 (toll-free in Alberta)

British Columbia

Consumer Protection BC (Toll Free: 1.888.564.9963) handles all of the collection agency complaints and they want to hears yours as well.

You can go directly to the Consumer Protection BC collection agency complaint page here.

Phone: 604.320.1667
Toll Free: 1.888.564.9963
Fax: 250.920.7181
Email: info@consumerprotectionbc.ca*

PO Box 9244 Victoria BC V8W 9J2   or

#307-3450 Uptown Blvd., Victoria BC V8Z 0B9

Ontario

Ministry of Consumer Services (toll free 1-800-889-9768) is the government agency in charge of policing the collection agencies. And boy are they busy over there….

We recommend calling them in addition to filing a written complaint  because it appears to be one of the more difficult provinces to have action taken against rogue collection agencies.

Ministry of Consumer Services
Consumer Protection Branch
5775 Yonge St. Suite 1500
Toronto, ON M7A 2E5
Fax: 416-326-8665
E-mail: consumer@ontario.ca

416-326-8800

or 1-800-889-9768

If you are receiving ‘draft’ statement of claims from Deanna Natale in Ontario be sure to check this article!

 

For Manitoba, Saskatchewan, New Brunswick, Nova Scotia, Northwest Territories, Quebec, Nunavut, Yukon Prince Edward Island, Newfoundland and Labrador use the links available at the Office of Consumer Affairs for your specific province.

 

Privacy Commissioner of Canada

If a collection agency discloses your personal information to a 3rd party or is incorrectly reporting something on your credit bureau, make sure to contact this department to discuss the matter.

You can read under the settled cases about the collection agency that reported incorrect credit bureau information and the bank employee that disclosed a customers bank balance to her ex-husband.

Privacy Commissioner of Canada

Toll-free: 1-800-282-1376
Phone: (613) 947-1698
Fax: (613) 947-6850
TTY: (613) 992-9190

112 Kent Street
Place de Ville
Tower B, 3rd Floor
Ottawa, Ontario
K1A 1H3

 

Legal Threats

Threats of legal action, lawyers sending ‘draft’ statement of claims and other shady tactics by the collection agency legal team should be take to the law society in your province.

Alberta Law Society

BC Law Society

Ontario Law Society

Posted in Fighting Back.

Why was my account sent to a collection agency?

Why do creditors send accounts to collection agencies?

When you sign any credit agreement, you probably never read all that fine print. Well, the fine print of every creditors agreement will stipulate somewhere ‘if you miss a payment or are late, then we have the right to ask for the outstanding balance whenever we want.’

And somewhere else in the agreement it will say ‘if your account is delinquent we can use a third party agent to recover money and list it on your credit bureau’

Sucks huh?

Whenever an account falls behind, even one day behind (which we’ve heard AMEX has done) the creditor has the right to send it to a collection agency and demand payment in full.

Most creditors will wait 3 months before doing this, since they obviously want you to pay interest until you die and your estate pays the balance out. But sometimes they will do it earlier, if you appear to be a ‘credit risk’ (or they’re just jerks).

The Dirty Secret

The really dirty secret is that the creditors use the 3rd party collection agencies as their pitbulls to limit their own liability. Think about it. Would someone at a BANK call you and treat you like dirt? How hard would one of their $8 an hour ‘customer service reps’ try to recover money? They wouldn’t try very hard and they wouldn’t be very successful at getting the money back.

By using 3rd party collection agencies the creditors can ‘outsource’ the dirty work to attempt to keep their image clean.

This way, the bank can have someone aggressively collect a debt for a commission and at the same time place any wrongdoing on a separate company. They’re aware of this little game and since it is cheaper AND being a bully works better than being ‘customer friendly,’ the collection agency is the perfect service provider to do the banks dirty work.

Posted in Payments.

How to Harass a Bill Collector

How to Harass a Bill Collector (and make them wish they never called you)

This is a post we should have made a LONG time ago. For anyone being harassed by bill collectors, let’s ponder the possibilities of how someone in debt can turn the tables on the collection agency.

If you can top these ideas on how to harass a bill collector PLEASE leave your best tactics in the comments below.

1. Phone the Ombudsman, Manager, President of the Bank

This is a great tactic because if you complain to someone else about how rude, annoying, unreasonable or obnoxious the person calling you is being AND tell them that they should do something to stop the bill collector from harassing you, it really puts them in a tight spot.

Especially if you make demands like wanting everything in writing or following up with that persons boss regarding your complaint.

Also, when contacting the manager, let them know you are contacting the ombudsman, and when contacting the ombudsman let them know you are contacting the ministry (thats the next step).  This way, everyone knows there is a good record of the complaints you are making and some type of action will have to be taken.

2. File a complaint with the ministry

This is a VERY good way to piss off a collection agency, not just the bill collectors but also the managers. This is because they have to fill out paperwork and respond to the government for any valid complaints (there are many) made to the government regarding harassment, privacy violations, threatening behavior and collection law violations.

Scroll down to your province name to locate your provincial government agency to contact here.

3. Have fun with the collectors calls!!

Not enough people do this!! The only problem is that it usually causes them to call more frequently, but it will make them realize that they are wasting their time with you eventually.

Answering every questions with a question can be fun. Or answering the phone and leaving it off the hook for 5 minutes, repeating as necessary. Telling them random stories about what you are eating or asking them personal questions about their lives usually can work quite well. This is for the creative types who have a bit of time available.

4. Log Everything and Always Ask Questions

Write down the collectors name, get their full company details, ask them for their collector license number. Then make sure you ask who their supervisor is and ask to speak to them about the debt. Then when you get the supervisor on the phone ask who the collection manager is and try to talk to them about the debt.

This is not only annoying but lets you avoid dealing with the lowly bill collector. Although the managers used to be bill collectors and are usually quite uneducated as well so it really isn’t much different.

5. Fax the office repeatedly

Write your name and phone number in the middle of a piece of paper with the words ‘please stop calling me’ below it. Then take a black piece of paper and use it to ‘frame’ your note you are sending to the agency.

This way when you send your request it will also drain their fax machine ink. Double annoying for the secretary.

6. Show up at their office

If they are local, you can always stop by their office to talk in person. You would be surprised how much the bill collectors fear meeting the people they talk to on the phone. At the very least they will usually become more reasonable after knowing you aren’t scared to come and meet them in person.

If you do have the guts to show up though, just snap a picture with your phone and say ‘I got what I came for’ and walk away, it will seriously mess them up in the head for few days if you do it correctly.

7. Call them back repeatedly for no reason

Two ways you can approach this:

Angry

You can call them repeatedly in an angry fashion telling them to stop harassing you, dial different extensions, talk to the secretary, managers and anyone else that will listen over and over and over telling them that their bill collector is a loser and needs to F off.

Crazy

Just randomly call them during your day and talk about ANYTHING other than your bill. You probably also want to tell the collector they are your only friend in the world.

Start in the morning, let the collector know what you had for breakfast, maybe call before lunch and let them know any good joke you may have heard during the day. If they start talking about your bills just say ‘I thought we were friends, and this is all you ever want to talk about.. ‘ then hang up. Then call them again in a couple hours like nothing happened and start with a new topic for them.

Also, make sure to leave them messages at night as well whenever anything ‘important’ happens in your life.

8. Record the phone calls and upload them on the internet

Use the collection agencies name and maybe even the bill collectors name in the title when you upload them to Youtube (or other social media sites that will work). This way when people search that agency or bill collectors name you can be assured it will eventually show up in google for others to know what scum bags they are!

Double points if you send the bill collector (or their co-workers) the links to the recorded calls you posted online.

9. Start a website or help an existing one that deals with Debt Assistance

There are very few places that REALLY get into the dirt and grime that the collection agencies throw at people in debt. Probably because most want to just turn a profit, but for the few good ones out there even just posting comments in a debt forum or telling others to check out a website that can help out can really mean a lot!

Basically send us a check. :)

 

POST YOUR IDEAS IN THE COMMENTS BELOW!

 

 

Posted in Fighting Back. Tagged with , , , .

Receiving a ‘draft’ statement of claim from Deanna Natale Law Offices

Receiving a Statement of Claim from Deanna Natale Law Offices

It is becoming extremely common for people in Canada who have outstanding debts at Global Collections to receive a statement of claim from Deanna Natale that ‘suggests’ the creditor may be taking legal action.

Our problem is not with Natale Law Offices suing on behalf of banks and financial institutions (which they do), but with the amount of ‘draft’ statement of claims being sent to intimidate and mislead people regarding possible legal action.

Deanna Natale practices law in the province of Ontario, however people in other provinces may receive these letters ‘suggesting’ they are pursuing litigation if the debt remains unpaid. Lawyers can only practice law in the provinces they have actually passed the bar exam in, which Deanna Natale has done in Ontario but no other provinces.

The first step with any type of legal threat is to always contact a lawyer to discuss your individual situation and the ‘claim’ that could be filed with the Ontario Courts.  If the claim appears to be nothing more than a scare tactic then contact Deanna Natale to request your account information in accordance with PIPIDEA.

Wait 30 days for the account information you have requested and information regarding the supposed legal action. If you are unable to get anywhere with Natale Law offices and the original creditor, you may want to contact the Ontario Ministry of Consumer Services as well as the Ontario Law Society to file a complaint.

From the Ontario Ministry of Consumer Services website:

A collection agency may not:

Use threatening, profane, intimidating or coercive language, or use undue, excessive or unreasonable pressure.

Give false or misleading information to any person.

The ministry receives many complaints regarding collection agencies every month, you must have proper documentation that you attempted to resolve the situation with no effort being made by the collection agency or law office.  This is not required though if you’re complaint is based on the misleading and threatening nature of a lawyer sending ‘draft’ statement of claims to people in debt in Canada, which by the way, the ministry has previous told agencies to stop doing.

The Ontario Law Society is another resource for filing a complaint regarding deceitful law practices in Ontario. If you believe Natale Law Offices should cease and desist the misleading tactic of sending ‘draft’ statement of claims as a form of intimidation, this complaint form should be used when filing your complaint.

Posted in Fighting Back, Legal Action.

Getting Proof of your Debt from a Creditor

Requesting Your Account History for a Debt

It’s possible that an any account listed with a collection agency could be listed with incorrect information. Telling a bill collector that the balance is wrong, the debt isn’t owed, statute barred, or they have the wrong person usually falls on deaf ears.

So the Canadian government has the office of the privacy commissioner to deal with businesses mishandling private information.

What you want to do is request the account history information in accordance with PIPEDA from the original creditor (and the collection agency).

This requires a registered letter to go to both companies, make sure it is clearly displayed to both companies that they were cc’d in the letter and you have requested the information. For the original creditors contact information check any financial institutions website for the ombudsman’s contact information. This is the person that deals with escalated issues such as these.

You may want to  also include a letter prepared to send to the privacy commissioner dated 30 days ahead of the date you are requesting the information, so they are both aware you plan to file a complaint with the privacy commissioner if you do not receive all of the information regarding the history of your account.

Your rights under PIPEDA can be found on the privacy commissioners website.

The important points to note from their website about requesting your individual information are:

1. Seeing your personal information

If you want to see the information that an organization holds about you, write to it directly with your request. Provide dates, account numbers and any other details that would help the organization track down the information you want.

Ordinarily, the organization must give you the information within a reasonable time and at minimal or no cost. There are, however, exceptions, such as if disclosure would threaten somebody else’s life or security.

If there is no response from the creditor then you are able to file a complaint. You must try to obtain the information from them previously though before filing this.

3. Considering a complaint

You are entitled to file a complaint if you believe a business is violating any provision of PIPEDA.

For example, you might complain if you run into trouble obtaining your personal information, if an organization refuses to correct information you consider inaccurate or incomplete, or if you suspect your personal information has been improperly collected, used or disclosed.

It’s important to try to settle the dispute yourself first. Under PIPEDA, organizations must have on staff a person who is responsible for privacy issues, and this is where you could begin.

You may also want to contact the organization’s industry association, ombudsman or complaints office, if there is one. For example, the Canadian Marketing Association and the Ombudsman for Banking Services and Investments handle customer complaints about their member companies.

If you aren’t satisfied with the outcome, you have the option of filing a complaint with the Office of the Privacy Commissioner of Canada.

Posted in Fighting Back.

Why Collection Agencies Refuse to Take Payments

The Reason Collection Agencies Refuse to Take Payments

Every time someone applies for credit, there is a lengthy contract you sign — which people rarely read for obvious reasons — that basically states:

“If we lend you money and request all of it back, for any reason at anytime, you agree that you will pay us back immediately.”

This is the ‘technical’ reason that payments aren’t accepted easily by bill collectors. The other reason is that it is in the collection agencies best interest to close as many files as quickly as possible.

Examples

Let’s take 2 scenarios where 100 delinquent accounts are listed at $10,000 each ($1,000,000 total debt) with a collection agency during a month.

Scenario 1: 100 people agree to $100/month payments.

The agency receives 100 payments of $100 = $10,000 during the month recovered on all debts listed, which is 1% of the total debt listed.

Scenario 2: 3 people settle their debts during the month and 10 make $100 payments. The 3 settlements are at $8,000, $8,000 and $6,000, but 87 accounts out of 100 remain unpaid.

The agency makes $23,000 ($13,000 more!) during the month in scenario #2 by ‘convincing’ 3 people to settle their debt and taking a few payments. They do not have payments on all accounts but they’ve made more money during the month and closed 3 files than in the ‘payment plan’ scenario above.

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Over the long term most people would think the agency would want to just take payments, however the more ‘files closed,’ the more new files they receive from the creditors they collect on behalf of. In addition to this, the multiple agencies that collect for creditors are in competition for the business that the creditors list.

The more files one agency closes over another, the more business one collection agency receives over the others.

This is why the first collection call from a bill collector will always be a demand for the debt to be paid in full. Even if they are aware the person cannot repay, they will usually threaten legal action and tell the person to ‘ask friends and family’ for help before hanging up.

Posted in Payments.

When a Creditor Gets a Judgment

What to Expect  When a Creditor Gets a Judgment

Creditor judgments are nothing more than pieces of paper that says Person A owes Person/Company B $X,XXX, plus court ordered interest and $XXX amount of costs (if costs are awarded).

The judgment holder then has to execute the judgment somehow to recover funds. This is generally done by either a garnishee of wages or a property lien. Occasionally a lien on another asset such as a vehicle is done (that’s why we check when buying used cars for liens), but these are more rare because vehicles can be more easily hidden or too low of value to actually recover anything from applying a writ.

Property Liens

The judgment holder can add this anywhere from a week to 15 days after obtaining a judgment against someone’s assets. It is an extremely secure method of recovering a judgment because at some point the homeowner will need to remortgage or sell their property. When that time comes, the lien has to be removed from title.  The other benefit of a lien on a property is you can apply to the courts to force sale the property if the person whose home you have a lien on does not repay the debt. This is a time consuming process though that most judgment holders (and judgment debtors) wish to avoid.

Wage Garnishee

The judgment holder can file a garnishee order with the courts. This is an order the courts make for your employer to repay the judgment through a portion of your wages. They will be required to forward funds to the courts which the judgment holder can then remove to put towards the outstanding balance of the judgment.

If your employer does not provide funds, or a letter to the court stating why no funds were paid, your employer could be liable for the full balance of your judgment.

There are MANY unpaid judgments in this country and recovery of judgments is not always an easy thing to do. Most provinces allow judgment renewals after ten years, which can be problematic if you’re still residing in the province the judgment was obtained.

This only outlines the most common situations for judgment recovery in Canada. Anyone facing potential legal action from a creditor should seek professional legal advice to ensure they make use of all options available to them.

Posted in Judgements.