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wendylefler · Jul 23, 2007, 09:55 AM

We had a 2nd mortgage on our property that was discharged dec 2004, and now the person has got a certificate pending litigation filed and statement of claim filed as of July 2007. We are representing ourselves and I think it fall outside the statue of limitations.
I also think that a discharged mortgage is just that? :confused:

Emland · Jul 23, 2007, 10:02 AM

Originally Posted by wendylefler

and now the person has got a certificate pending litigation filed and statement of claim filed as of July 2007.

What person are you talking about?

Did the 2nd mortgage go into default?

What state is the property in?

ScottGem · Jul 23, 2007, 10:07 AM

Do you mean it was discharged in a bnakruptcy? Or do you mean it was written off? The two are very different. If it was discharged in a bankruptcy, then the debt no longer exists and this "person" has no right to collect it. All you need to do is show up in court with a copy of your bankruptcy showing the debt as discharged and the case will be dismissed.

However, if it was written off that has no effect on your obligation to pay. The last date of activity and where you live will determine the SOL.

wendylefler · Jul 23, 2007, 10:30 AM

Originally Posted by wendylefler

We had a 2nd mortgage on our property that was discharged dec 2004, and now the person has got a certificate pending litigation filed and statement of claim filed as of July 2007. We are representing ourselves and I think it fall outside the statue of limitations.
I also think that a discharged mortgage is just that??:confused:

My husbands father had a 2nd mortgage on our property to secure a loan he gave him as an early inheretance, and then discharged it in dec 2004. Now in June 2007 he wants to put another lien to secure the money again and we are being sued for that debt. I want to know if the statue of limitations covers us in that it has been more than 2years now?

Emland · Jul 23, 2007, 10:36 AM

Who owns the property? What exactly do you mean by discharge?

ScottGem · Jul 23, 2007, 10:40 AM

This is still confusing. You need to define what you mean by discharge. Do you have a document that states the debt was paid, or forgiven? Also 2 years is short for an SOL.

wendylefler · Jul 23, 2007, 10:43 AM

My husband and I own the property and we are on title.
My husbands father had a second mortgage on the property to secure an early inheritance he gave him long ago, and he discharged the second mortgage in Dec 2004.
We refinaced and got a new first and increased to pay off some debts we had.
Now more than 2 years later my husbands father is sueing us in civil court wanting to secure the money he gave him again.:confused:

wendylefler · Jul 23, 2007, 10:48 AM

Our bank BMO had my husbands father sign to have this mortgage discharged and we have a statement that the mortgage was completely discharged from land title registry office.
The debt was a second mortgage payment on demand, but balance owing NIL, so the debt was discharged.
My husbands father now over 2 years later, wants to sue us and have the debt reinstated?

Emland · Jul 23, 2007, 10:58 AM

I am still confused. Your father-in-law can't borrow against property he doesn't have legal title to.

wendylefler · Jul 23, 2007, 11:13 AM

I'm sorry, its kind of a long story to explain, but I will try again.
To try and make a long story short: Before I met my husband, his father gave him an early inheritance. My husband had signed onto a second mortgage with his father to secure the money. My husband and I got married in 2002 and in Dec 2004 his father had the mortgage discharged with the land registry office. Now in 2007 my father in law is sueing both my husband and I in civil court wanting us to resign the money and more even, a second mortgage to him. He claims that he had only discharged the mortgage with intensions of us to be able to increase our mortgage and then sign another 2nd to him so that he could secure the money he gave to his son again, and that we have refused.

ScottGem · Jul 23, 2007, 11:14 AM

I'm still bothered by this word discharge. I'm not sure if the debt was actually discharged or not. I think, in order to refinance, your bank said that you had to remove the second lien as an encumbrance so their interest would be preserved. So I'm guessing your father-in-law discharged the lien but not the debt.

However, if you have some papwerwork that says the debt balance was discharged and the balance was Nil, then he can't sue for the balance. I doubt if the SOL has passed in only 2 years.

But it all hinges on the definition of discharge. What EXACTLY does your paperwork say?

wendylefler · Jul 23, 2007, 11:27 AM

The discharge papers say the 2nd mortgage and the instument # was completely discharged. We were then able to increase our new first mortgage. There were no conditions.
I think that the statue of limitations in Ontario is 2 years now?:confused:

LisaB4657 · Jul 23, 2007, 12:00 PM

The word "discharge" isn't really important here. What I don't understand is, if your f-i-l gave your husband an "early inheritance", why does your husband have to pay it back? A mortgage is given as security for the repayment of a debt. Did your f-i-l loan your husband the money or give him the money? If he loaned him the money then he will have a hard time proving to a court that it was a loan and not a gift. If he gave him the money then he is not entitled to a lien for securing repayment.

Also, if the money was a loan then your f-i-l did not have to discharge the mortgage when you refinanced. All he had to do was sign a subordination of mortgage and the lender would have gone ahead with the refinance.

So when your f-i-l gave the money to your husband, was it a loan or an early inheritance?

wendylefler · Jul 23, 2007, 12:10 PM

My husband was told by his father that it was a gift of an early inheritance, but that he had to sign papers allowing his father to put the money down on the house my husband was buying. To my husbands surprise when I came along, he had signed on to a second mortgage with his father. He didn't know what he had signed. Any way we visited the laywer who drew this up and she gave us a statement of mortgage, balance owing NIL.
We went to get a new first mortgage and the bank told his father that he needed to discharge the 2nd mortgage, as the repayment was balance owing NIL, was absurd. F I L signed to have it discharged and we have the discharge paper from the land registry office. Discharged in Dec 2004. Now in July 2007 F I L has decided he wants the money he gave his son secured in the form of a second mortgage again. We are refusing now at this point since we got court papers. We feel it falls now under the Statue of limitations?

LisaB4657 · Jul 23, 2007, 12:13 PM

The Statute of Limitations may merely be one defense against the lawsuit by your f-i-l. A much stronger defense is the fact that there is no money due from your husband to your f-i-l. Your f-i-l issued a written statement that there is no balance owing and he also told your husband that it was a gift, not a loan. So how is he going to prove to a court that your husband owes him the money?

A lien can only secure money given as a loan, not a gift.

wendylefler · Jul 23, 2007, 12:34 PM

He had my husband sign on to a 2nd mortgage in the beginning, and he has that. But since that we have the discharge paper saying, it was discharged. The bank manager had him discharge it because the balance read NIL. The laywer who wrote up the original second mortgage explained to us that there was no balnce owing as it was an early inheritance, and it was just there to secure the money giving to my husband. And gave us the statement showing NIL. That is why the bank had him discharge it. We needed to refinance a new first mortgage and the bank said that he had to release that 2nd. He did, but now he wants to secure it again. He staes in his statement of claim that he has repeatedly asked us to sign back on, and that we have refused. He is using his old mortgage doc's to prove that there was a debt. My husband didn't know he had even signed on to it to begin with.:eek:

LisaB4657 · Jul 23, 2007, 12:39 PM

Your f-i-l cannot get a lien against the property unless he can prove that your husband owes him money. The old mortgage docs will not prove that there is a debt because your f-i-l issued a statement of mortgage showing a $0 balance.

Does your f-i-l expect your husband to pay the money back?

wendylefler · Jul 23, 2007, 12:43 PM

In the beginning , no, but since my husband and I almost separated he now wants it secured again. Now he is saying he wants the money back or secured, so that in case we don't make it, It will be paid back as a debt? My husband and I are going to make it:D

LisaB4657 · Jul 23, 2007, 12:47 PM

Well, based on what you've said here I can't see how your f-i-l has a hope or prayer of getting the money or the lien unless your husband gives it to him voluntarily.

I strongly recommend that you and your husband not sign anything without the advice of an attorney who represents you. (This means that you should not rely on the advice of an attorney who represents your lender or your f-i-l! )

Hang in there and good luck!

ScottGem · Jul 23, 2007, 12:49 PM

As Lisa is saying (and I should have picked up on), this was a gift. Tell your f-i-l to sue you if he wants, since you have documentation that the lien was discharged and the balance nil and you ave his statement that the money was an early inheritance, ergo a gift, he doesn't have a leg to stand on.