What a demand letter is
A demand letter is your lender formally telling you that the mortgage is in default and setting out what it wants paid, and by when. It usually arrives after a run of missed payments and after phone calls have not resolved anything.
It is written to sound final. It is not final. Nothing has been filed in court at this stage, no judge has looked at your file, and no date has been set for anything.
What it is not
- It is not a court order. An Alberta foreclosure is a court process, and a letter from a lender is not the court.
- It is not an eviction notice. Nobody is being removed from a home because of a demand letter.
- It does not mean the house is gone. It means the lender has started to paper the file.
Why this is the best stage to be reading this
Of every point in an Alberta foreclosure, this is the one with the most options still attached to it, because nothing has been decided by anyone but the lender. What is still ordinarily available here:
- Reinstating the mortgage or refinancing it, if the arrears can be cleared or the loan replaced.
- A payment arrangement with the lender, which is easier to negotiate before legal costs start being added to what you owe.
- Selling on your own terms — with time to prepare and market the place properly, which is where the price difference lives.
- Simply working out what a sale would leave you, so the decision is made on numbers rather than on fear. The calculator does that in your browser.
What usually happens if nothing changes
The next step is a Statement of Claim filed in the Court of King's Bench of Alberta, which starts the court case and begins adding legal costs to the balance. What that stage involves is set out here. The whole sequence from here is on the timeline page.
The one thing worth doing today
Get a written payout figure from your lender. Not the arrears — the payout, which includes costs. Almost every decision from here depends on that number and on what your home is currently worth, and most people are working from a guess on at least one of them.
Free help in Alberta
These are independent organisations. We are not connected to them and we are not paid to list them.
- Medicine Hat Legal Help Centre — 403-712-1021. free help that explicitly covers debt and foreclosure, for low and moderate incomes — evening volunteer-lawyer clinics
- Money Mentors — 1-888-294-0076. by phone
- Legal Aid Alberta — 1-866-845-3425. by phone — no Medicine Hat office
- Community Legal Clinic — Central Alberta — 1-877-314-9129. free 30-minute consults with a volunteer lawyer, offered remotely — their service area includes Medicine Hat
If a consumer proposal or bankruptcy might be part of your situation, speak to a Licensed Insolvency Trustee. They are the only people licensed to advise on it.