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Divorce upsets the fragile balance in his financial resources

Claude owes $15,000 and his salary must allow him to pay off his creditors. The problem is that since his divorce, he has to keep paying his share of the mortgage in addition to the rent for his new apartment.

Claude earns $3,400 net per month. His car is rented, and since his divorce two years ago, he has occupied an apartment for reasonable rent.

But his budget is in deficit, because the divorce judgment states that he must continue to pay his share of the mortgage until Genevieve, his ex-wife who lives in the former family home, buys her share of the house.

There is no room for maneuver

The problem is that Genevieve is unable to obtain the necessary funding. If by that time she had qualified for half of the property, she did not meet the criteria required to have a mortgage that would cover the entire residence.

Furthermore, the value of the home roughly corresponds to the current mortgage amount since, at the time of purchase, the down payment was limited to the strict minimum necessary.

So Claude swallows a large portion of his income in mortgage payments, which, combined with his other monthly expenses, don’t leave him the room he’ll need to pay off his debts, especially credit card balances.

the same oxygen

So he went to consult insolvency experts to find a workable solution. Already bankrupt, he wanted to avoid finding himself in this situation, with all the repercussions that would have on his credit file.

“Quickly, the consumer proposal was discussed with Claude. The creditors agreed to a settlement of $10,000 payable at a rate of $167 per month for 60 months,” explained Pierre Fortin, licensed insolvency trustee, president of Jean Fortin & Associates.

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This reduction in the amount owed gives him a much needed breath of fresh air. Instead of having to pay a minimum of $525 a month on his credit cards, he now pays just $167 under the offer.

As for his obligations in relation to the house, a clause was added in the consumer offer providing for his assignment of the premises. This means that if the mortgagee takes back the property for default and sells it at a loss, he cannot claim it from Claude, because it would be part of the proposal, ”explains Pierre Fortin.


  • Separations and divorces represent one of four insolvency cases that Jean Fortin has handled. Of course, these situations are unpredictable, but the only way to survive financially if this happens is to keep personal debt levels low. Are you thinking of buying a home as a couple? Be aware that by only making a small down payment, it can be difficult to sell the building if, for some reason, you have to get rid of it quickly.
  • It is not enough to agree to redeem half of the house by your ex-spouse, it is still necessary for that person to be eligible for the mortgage, because who said redemption says rehab process, resistance test, etc. With the current rise in mortgage rates, qualifying can be more difficult.
  • Even without quibbles, dismissal greatly upsets finances. With the same two incomes, you now have to pay for two houses, move, buy new furniture and a car if necessary, etc. A good deal, emergency fund and fair distribution of debt reduce the risk of finding oneself in financial turmoil.