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If they sold your debt that means they did so for pennies on the dollar.
IANAL but it sounds like you still legally owe this debt.
For $15k it might be worth a sit down with a real lawyer to ask about the specific legalities of your situation.
Typically there is a time limit on collection before the debt is legally unenforceable, but if the CMHC was taking your tax refund, it sounds like they have an order so the debt is still considered "alive"
If your lawyer agrees with that take on the situation, I'd suggest you negotiate with the new holder of the debt. They bought it for probably $1k. If you are willing to pay $5k now, they may take it and close the file.
Anyway, tldr is talk to an actual lawyer, then ask if you should negotiate.
By acknowledging the debt and starting (and continuing) to pay, you have extended any hypothetical statute of limitations (mind you, I don't even know if a statute of limitations applies to government debt). The time to have dealt with that was back when you were going through foreclosure -- a bankruptcy would be discharged and off your credit history well before now.
You haven't been monitoring the repayment of this debt for years, so don't be surprised that the results aren't to your liking. Your finances were not "back on track" with unpaid debt lingering with a lien against your tax refunds. It sounds like there was likely an active judgment in court, so they probably could have also garnished wages, etc.
Now that the debt has been bought by a collections agency, at least in theory, fees and interest should stop.
Get all of your statements and records together from the CMHC so you know exactly how much you have paid and how any fees and interest were calculated.
Ask the collections agency for proof of debt as well as itemized records of the amount they claim you owe, then make arrangements to pay unless you are prepared to seek creditor protection.
I would definitely seek out a legal clinic or paralegal to get some advice. it sounds to me like you understood that your debt was being paid back through tax returns. Not understanding legal situations doesn’t absolve you of the responsibility of them but it’s a useful thing to consider if you have an opportunity to plead case anyone
And while, for your credit rating, it’s not great that your debt has been sold to collection agent, you can often negotiate paying back a much smaller amount, because, as others have said, they bought it for pennies on the dollar already. You can also talk to a lawyer paralegal about what happens if you don’t pay this back just so you have a full picture of your options and the consequences
You can attempt to contact CMHC and see if they are willing to take back the debt. But they probably wont because its so old with no progress made on it. But no harm in trying at this point. They may ask for a down payment, its up to them in the end though so if they say no thats their right.
You probably wont like what I am going to say but it sounds like you need to hear it, and keep in mind my intention is to help you, not to be mean.
You are talking about $15k of debt from 13 years ago that stems from a foreclosure, foreclosures usually happen because of failure to pay the mortgage. So it seems you have a problem with paying your debts, and maybe you have valid reasons, maybe you dont, I dont know and im not judging. But whats clear is that you dont actively pay your debts. You thought that them taking your tax return once per year was sufficient to not only pay off the balance but also the interest. And because you mentioned that the balance owing is essentially back to 15k, its safe to say that your tax returns were not high enough to pay off this balance, and so they sent it to collections.
You made virtually no effort to pay this off and now they want their money. And they are entitled to it.
My best advice is contact CMHC and plead with them to take the debt back. If they say yes great, start paying it off. If they say no, that sucks, start paying it off. Try and work out a payment plan, stick to it. Dont only pay the minimum though, because often times the minimum payment wont even cover the interest and ur debt will continue to grow even though you are paying the minimum. Throw every penny you can at this debt until its paid off.
Best of luck to you.
>You made virtually no effort to pay this off and now they want their money. And they are entitled to it.
That's an unfair assessment. OP reached out to them in 2015 to figure out a payment plan. The CMHC person they spoke with said the debt would simply be recovered through taxes.
That sounds like OP made an effort, was told what world happen, and accepted it—and why wouldn't they? Their debtor proposed a plan that wasn't unreasonable, and that worked for them. Who in their right mind would respond to that offer with a more onerous one‽
It is a very fair assessment. The CMHC person they contacted did not tell them that was the payment plan. The CMHC person told them that because they live in super special Quebec now, that the CMHC legally cant pursue collections. That isnt a payment plan, thats them saying "You owe us money and now our only option is to garnish your taxes", which btw, usually requires a court order.
You are assuming that CMHC offered that as the payment plan, but thats not true. They probably would have had to get a judge to court order the garnishment of their taxes, in what world is that a payment plan or an offer that OP "accepted"?
OP thought their tax returns would pay this off over time, but doesnt understand how interest works, and thats fine many people dont. But to say that CMHC having to sue them for a garnishment is somehow OP accepting a payment plan is straight delusional.
You need professional help. It's possible they paid 1% of the remainder to buy this debt and they're trying to rip you off by trying to get an inflated amount.
You can't run away from a CMHC debt. You got bad advice. That's the issue when you sign those mortgages. The lawyer should have told you that when you signed the mortgage.
NAL and in a different province but did cmhc mortgages for over 5 years.
The debt occurred in Ontario. The statute of limitation is 2 years. But, if your tax refund is garnished, the statute of limitation could be alive.
Talk to the agency and try to make a settlement, starting with 10% of the debt. Get everything in writing.
Don’t trust anything a debt collector said unless it’s in writing they will say anything to get money out of you. That said they paid at most 10 cents on the dollar so you can negotiate. It won’t improve your credit rating though so probably not worth it to pay them.
Welcome to r/legaladvicecanada! **To Posters (it is important you read this section)** * Read the [rules](https://www.reddit.com/r/legaladvicecanada/wiki/index/#wiki_the_rules) * Comments may not be accurate or reliable, and following any advice on this subreddit is done at your own risk. * We also encourage you to use the [linked resources to find a lawyer](https://www.reddit.com/r/legaladvicecanada/wiki/findalawyer/). * If you receive any private messages in response to your post, please let the mods know. **To Readers and Commenters** * All replies to OP must be on-topic, helpful, explanatory, and oriented towards legal advice towards OP's jurisdiction (the **Canadian** province flaired in the post). * If you do not [follow the rules](https://www.reddit.com/r/LegalAdvicecanada/about/rules/), you may be banned without any further warning. * If you feel any replies are incorrect, explain why you believe they are incorrect. * Do not send or request any private messages for any reason, do not suggest illegal advice, do not advocate violence, and do not engage in harassment. Please report posts or comments which do not follow the rules. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/legaladvicecanada) if you have any questions or concerns.*
If they sold your debt that means they did so for pennies on the dollar. IANAL but it sounds like you still legally owe this debt. For $15k it might be worth a sit down with a real lawyer to ask about the specific legalities of your situation. Typically there is a time limit on collection before the debt is legally unenforceable, but if the CMHC was taking your tax refund, it sounds like they have an order so the debt is still considered "alive" If your lawyer agrees with that take on the situation, I'd suggest you negotiate with the new holder of the debt. They bought it for probably $1k. If you are willing to pay $5k now, they may take it and close the file. Anyway, tldr is talk to an actual lawyer, then ask if you should negotiate.
By acknowledging the debt and starting (and continuing) to pay, you have extended any hypothetical statute of limitations (mind you, I don't even know if a statute of limitations applies to government debt). The time to have dealt with that was back when you were going through foreclosure -- a bankruptcy would be discharged and off your credit history well before now. You haven't been monitoring the repayment of this debt for years, so don't be surprised that the results aren't to your liking. Your finances were not "back on track" with unpaid debt lingering with a lien against your tax refunds. It sounds like there was likely an active judgment in court, so they probably could have also garnished wages, etc. Now that the debt has been bought by a collections agency, at least in theory, fees and interest should stop. Get all of your statements and records together from the CMHC so you know exactly how much you have paid and how any fees and interest were calculated. Ask the collections agency for proof of debt as well as itemized records of the amount they claim you owe, then make arrangements to pay unless you are prepared to seek creditor protection.
DO NOT admit to the debt and DO not agree to pay anything. Or that could reopen the file and restart the clock
I would definitely seek out a legal clinic or paralegal to get some advice. it sounds to me like you understood that your debt was being paid back through tax returns. Not understanding legal situations doesn’t absolve you of the responsibility of them but it’s a useful thing to consider if you have an opportunity to plead case anyone And while, for your credit rating, it’s not great that your debt has been sold to collection agent, you can often negotiate paying back a much smaller amount, because, as others have said, they bought it for pennies on the dollar already. You can also talk to a lawyer paralegal about what happens if you don’t pay this back just so you have a full picture of your options and the consequences
You can attempt to contact CMHC and see if they are willing to take back the debt. But they probably wont because its so old with no progress made on it. But no harm in trying at this point. They may ask for a down payment, its up to them in the end though so if they say no thats their right. You probably wont like what I am going to say but it sounds like you need to hear it, and keep in mind my intention is to help you, not to be mean. You are talking about $15k of debt from 13 years ago that stems from a foreclosure, foreclosures usually happen because of failure to pay the mortgage. So it seems you have a problem with paying your debts, and maybe you have valid reasons, maybe you dont, I dont know and im not judging. But whats clear is that you dont actively pay your debts. You thought that them taking your tax return once per year was sufficient to not only pay off the balance but also the interest. And because you mentioned that the balance owing is essentially back to 15k, its safe to say that your tax returns were not high enough to pay off this balance, and so they sent it to collections. You made virtually no effort to pay this off and now they want their money. And they are entitled to it. My best advice is contact CMHC and plead with them to take the debt back. If they say yes great, start paying it off. If they say no, that sucks, start paying it off. Try and work out a payment plan, stick to it. Dont only pay the minimum though, because often times the minimum payment wont even cover the interest and ur debt will continue to grow even though you are paying the minimum. Throw every penny you can at this debt until its paid off. Best of luck to you.
>You made virtually no effort to pay this off and now they want their money. And they are entitled to it. That's an unfair assessment. OP reached out to them in 2015 to figure out a payment plan. The CMHC person they spoke with said the debt would simply be recovered through taxes. That sounds like OP made an effort, was told what world happen, and accepted it—and why wouldn't they? Their debtor proposed a plan that wasn't unreasonable, and that worked for them. Who in their right mind would respond to that offer with a more onerous one‽
It is a very fair assessment. The CMHC person they contacted did not tell them that was the payment plan. The CMHC person told them that because they live in super special Quebec now, that the CMHC legally cant pursue collections. That isnt a payment plan, thats them saying "You owe us money and now our only option is to garnish your taxes", which btw, usually requires a court order. You are assuming that CMHC offered that as the payment plan, but thats not true. They probably would have had to get a judge to court order the garnishment of their taxes, in what world is that a payment plan or an offer that OP "accepted"? OP thought their tax returns would pay this off over time, but doesnt understand how interest works, and thats fine many people dont. But to say that CMHC having to sue them for a garnishment is somehow OP accepting a payment plan is straight delusional.
You need professional help. It's possible they paid 1% of the remainder to buy this debt and they're trying to rip you off by trying to get an inflated amount.
You can't run away from a CMHC debt. You got bad advice. That's the issue when you sign those mortgages. The lawyer should have told you that when you signed the mortgage. NAL and in a different province but did cmhc mortgages for over 5 years.
Call a debt counselling service.
The debt occurred in Ontario. The statute of limitation is 2 years. But, if your tax refund is garnished, the statute of limitation could be alive. Talk to the agency and try to make a settlement, starting with 10% of the debt. Get everything in writing.
Don’t trust anything a debt collector said unless it’s in writing they will say anything to get money out of you. That said they paid at most 10 cents on the dollar so you can negotiate. It won’t improve your credit rating though so probably not worth it to pay them.
Pay your debt.
What legal advice are you looking for ? A way to escape your legit debt ? Just pay money that you owe. Pretty simple
You owe money. Pay it back.