Behind on Your Mortgage — Can Having Your Spouse or Partner Sue You in Family Court Stop the Bank From Selling? Markham Chinese Divorce Lawyer: No

Behind on the mortgage. Maybe a job loss, maybe business went south, maybe the rate hikes made the payments unbearable. The bank’s letters keep coming, and the house looks like it’s slipping away. Someone comes up with an idea: have my spouse or common-law partner sue me in family court. The thinking goes — the house is now in litigation, the court hasn’t decided, so the bank can’t touch it, right? Stall for a few months until money loosens up, or until prices go up. And if the bank ends up stuck, that’s a win too.

The answer: no. That road goes nowhere, and it can leave you worse off. Let’s do the math properly.

Will family court protect the house and stop the sale?

No. When family court sees a house, its first instinct is to sell. That’s the standard move, no doubt about it.

The logic is simple: the house is family property, two people splitting it, neither can take half a house, and they can’t live in it together. The cleanest way is to sell and split the money. Judges do this every day — the ending is a sale with their eyes closed.

Some people think: the house is in a court fight, nothing decided yet, so the bank has to wait. That’s a misunderstanding. A family case is between the two of you, and the orders bind the two of you. The bank isn’t a party to that case, and a family court order doesn’t reach the bank. The bank’s power of sale is a separate process — it moves ahead whether or not the two of you are fighting in court.

So counting on a lawsuit to “freeze” the house and keep the bank away — that doesn’t exist in real life.

They say they didn’t know about the loan — can we hold off paying?

Those are two different things. Don’t mix them up — this is the most common confusion.

“Didn’t know about the loan” — say the husband went to the bank alone, renewed, refinanced, and the wife says she never signed, never knew. What gets fought in court is the internal accounting between the two of you: is this debt joint or his alone; did the money go to household expenses — money spent on the family is usually treated as joint debt; when dividing property, who carries more of it and who carries less.

But the bank goes by the contract and the mortgage. Whose signature is on the loan, whose house the mortgage is registered against — that’s who and what the bank comes after. Even if family court ends up deciding the debt is the husband’s alone, the bank can still sell the house, because the mortgage sits on the property. It can’t run away.

And family court will never tell the bank “they didn’t know, hold off collecting.” The court doesn’t have that power and won’t say it.

So whether the partner knew affects how the two of you split the debt — not whether the bank gets paid or the house gets sold. The bank gets its money, the house gets sold. Two separate sets of books.

When would a court ever pause a sale?

Only when the loan itself is in question — when nobody’s even sure what’s owed.

Say identity theft, someone took out a loan in your name; a forged signature, paperwork faked by a broker; the loan amount doesn’t add up, the bank’s number and your number don’t match. In those cases, what’s owed isn’t settled — selling first and finding out the loan was fake later, who do you chase? So the court may hold the sale and get the loan itself sorted out first.

An ordinary default — just can’t pay, no dispute over how much or whether it’s owed — isn’t in that category. “Can’t pay” is not “don’t have to pay.” Being broke is not a defence. The court won’t tell the bank to wait for you because you can’t pay.

Is it worth having your spouse sue just to stall the sale?

No. The math is simple.

Family litigation bills by the hour. Every call with the lawyer, every document prepared, every court appearance — billed. A case drags three months, six months, and the legal fees keep running. Not a dollar less.

Spend all that — lawyer, procedures, waiting for court dates, months of stress — and the order at the end still says sell. For someone already in default with no money for the mortgage, that’s legal fees spent for nothing, with the outcome unchanged and months lost. Money that could have gone toward the mortgage, maybe buying two more months with the bank. You do the math on whether that money was well spent.

What happens if it drags until the bank sells it itself (power of sale)?

Worse. That’s the worst road.

With power of sale, the bank hires its own lawyers and runs the process to sell the house. The bank’s legal costs and process fees end up on you — added to what you owe, taken out of the sale proceeds. You owe just as much, plus an extra bill.

And the bank sells with a completely different mindset than you. You’d wait for a good price — tens of thousands more is tens of thousands. The bank just wants its loan back. Enough to cover the bank, and it’s done — it won’t wait around for top dollar for your sake. Sold cheap, and you’re the one who eats the loss.

So dragged to the bank’s sale: the house still sells, for less than you’d get yourself, with extra fees on top. You lose on every side.

Is there any room left to fix this? Yes — but in three stages, and it gets harder each time

Stage one: the bank hasn’t sued yet. This is when you have the most power. Payments stopped, the bank starts calling, letters come, calls come — don’t hide. Talk to the bank, explain the situation, ask for more time, ask if you can pay part of it now. The bank doesn’t want a legal fight either — it costs them money and time. If you reach out, your chances of getting more time are at their best.

Stage two: the bank has sued, but no judgment yet. You can still talk. The house is still yours, you’re still the owner, you still have a say. You can respond and negotiate a settlement with the bank: give me time, I’ll sell it myself. If they agree, the court process pauses, you list with an agent and sell for real. Get a purchase agreement and show the bank — proof you’re actually selling, not stalling. Sell on the agreed timeline, the bank gets paid, the process ends. Selling yourself always beats a bank fire sale.

Stage three: the court granted judgment. Then there’s nothing left to talk about — the judgment gets enforced. The bank has its judgment, the process moves forward on its own, and how the house is dealt with is no longer in your hands. Going back to beg the bank for a break — the bank has no reason to listen, and it usually goes nowhere.

So the earlier you move, the better. Talk before the bank sues, and you have the most room; sued but no judgment yet, you can still negotiate; once judgment lands, all that’s left is enforcement.

So what’s the right move?

One line: don’t use family litigation to stall the bank. Stalling just means more legal fees, more costs, and the house sells anyway.

Behind on the mortgage, the right order is: figure out what stage the bank is at. Not sued yet — talk to the bank now and buy time. Sued but no judgment — move fast on a settlement and get the “I’ll sell it myself” path locked in. Judgment granted — stop hoping, deal with it and cut your losses.

Mortgage in default — the longer you drag, the more you lose. What matters is which stage the bank is at and grabbing the window while you can still talk. Book an initial consultation (30 minutes, $220+HST). Call 647-930-6688.

This is general legal information only. Not legal advice. No lawyer-client relationship.