Nine ways out of an Alberta foreclosure, and when each one closes
The short answer
An Alberta homeowner behind on a mortgage has nine realistic options: catch up, ask the lender for new terms, refinance, take a second mortgage, sell it yourself, sell with the lender's agreement, a consumer proposal, bankruptcy, or hand over the title. Four keep you in the house, and almost all close at the final order.
Key takeaways
- Four of the nine end with you keeping the house, and none of those four involve selling anything.
- The options close one at a time as the court process moves, so the real question is which are still available today.
- Catching up the payments is the simplest and the one people dismiss fastest — you keep that right throughout.
- Lenders are far more willing to rework the terms before they have filed in court, because their own costs are lower.
- Selling it yourself is what pays most where there is equity, and it closes the moment the court takes over the sale.
- A consumer proposal and bankruptcy go through a licensed insolvency trustee and are their call, not a real estate agent's.
- Handing over the title is right only where there is no money in the house and no realistic way to catch up.
- Which column you are in comes down to two numbers: what you owe, and what the home would sell for today.
Say the quiet part first
I am a real estate agent. You should assume I have an interest in one particular outcome on this list, which is exactly why the options that do not involve me come first and are described properly.
Four of the nine end with you keeping the house. None of those four involve selling anything.
Why the list gets shorter every month
Almost every option below disappears once the court makes its final order. Not all at once — one at a time, as the process moves.
That is the single most useful thing to understand about your situation. The question is not really “what are my options”; it is which ones are still open today, and the answer gets worse the longer you wait.
| Option | What it is | Where it leaves you | When it closes |
|---|---|---|---|
| Catch up the payments | Pay the arrears and costs so far | You keep the home | Any time before the whole loan is called in |
| Ask the lender for terms | Add the arrears to the loan, stretch it out, or pause payments | You keep the home | Easiest before court papers — still possible after |
| Refinance | A new mortgage pays off the old one | You keep the home | Before the final order, and you need a lender to agree |
| A second mortgage | Private money clears the arrears | You keep the home | Before the final order |
| Sell it yourself | A normal listing; the mortgage is paid out of the proceeds | You keep whatever is left over | Before the court takes over the sale |
| Sell with the lender’s agreement | Sell for less than you owe, with the bank agreeing to clear the debt | The debt is settled; nothing left over | Before the final order, and the bank has to say yes |
| Consumer proposal | A formal deal with your creditors through a trustee | Depends on the deal | Before the final order |
| Bankruptcy | Filed through a trustee | Usually the home is lost | Before the final order |
| Hand it over | Agree to transfer the title without a sale | You walk away with nothing | Any time |
The four that keep you in the house
Catching up is the simplest and the one people dismiss fastest. Right through this process you keep the right to pay what is owed and stop the whole thing. If the problem was temporary — an illness, a gap between jobs, one bad quarter — and the money is there now, this ends it.
Asking the lender for terms means adding the arrears onto the loan, stretching the payments out, or pausing them for a while. Lenders are far more willing to do this before they have filed in court, because their own costs are lower and the file is not yet with their litigation lawyers. This is the single best reason to pick up the phone early.
Refinancing replaces the mortgage outright. It needs real value in the home and income you can prove, and it needs a lender to say yes — which gets harder once there are court papers registered against your title. A second mortgage from a private lender clears the arrears at a higher rate. That buys breathing room rather than fixing anything, and it only makes sense if the problem really is short-term.
The two that involve selling
Selling it yourself is what this series is mostly about. If there is money in the house and a sale is where this realistically ends, doing it on your own terms — your agent, your price, normal time on the market — is the version that pays you the most. It closes the moment the court takes over.
Selling with the lender’s agreement is for when the house is worth less than you owe. The bank agrees to release the mortgage for less than the full amount. It settles the debt and leaves you nothing, and because the bank has to approve it, it takes longer to arrange than a normal sale.
The two that are not mine to advise on
A consumer proposal and bankruptcy both go through a licensed insolvency trustee, and both stop creditors in their tracks the moment they are filed. A proposal makes sense when the mortgage is only part of a bigger debt problem. Bankruptcy is for when there is no realistic way through, and it usually costs you the house.
Whether either is right for you is a trustee’s call, not mine. If what you owe goes well beyond the mortgage, have that conversation first — it changes what the property decision even is. The Centre for Public Legal Education Alberta explains both in plain language, and Legal Aid Alberta can help if cost is what is stopping you getting advice.
And the last one
Handing it over means agreeing to transfer the title to the lender without a sale. You walk away with nothing, and you can do it at any point.
It is the right answer in exactly one situation: there is no money in the house, no realistic way to catch up, and ending it is worth more to you than the months. Anyone who suggests it before establishing all three of those is saving themselves work, not helping you.
How to find out which column you are in
Every option above turns on two numbers: what you owe including arrears and costs, and what the home would actually sell for today.
If the second is meaningfully bigger than the first, four of these keep you in the house and one puts money in your pocket — and your job is to move before the cheapest ones close. If it is smaller, the list shortens to the lender’s cooperation, a trustee, or handing it over, and the sooner you know that, the fewer months of costs pile up against a house you were never going to keep.
Finding out the second number is free and takes a day, and it is the part Ryan is the right person to help with — not just what the home is worth, but which of the nine options above are realistically still open to you once that number is on the table.
The rest of this series
Start with the overview if you have not read it: Foreclosure in Edmonton: what to do when you’re behind on your mortgage. These four go deeper on one part of it each.
4. Nine options, and when each one closes (you are here)
Ryan McCann
Ryan McCann is an Edmonton REALTOR® with over 23 years of experience helping more than 2,200 buyers and sellers. His work spans every Edmonton neighbourhood and property type, bringing deep local market knowledge and practical guidance to buying or selling a home in Edmonton.
He has worked on all sides of the foreclosure process, representing both sellers and buyers through the courts, and has a deep understanding of how it actually unfolds.
Contact Ryan today at 780-964-8445 to talk through your next step.
Reviewed 20 September 2026
Sources
Law of Property Act, RSA 2000, c L-7, ss. 39–45 (Alberta King’s Printer) — https://kings-printer.alberta.ca/documents/Acts/l07.pdf
J.F. Reich & D.M. Hendrix, “The Foreclosure Sale Process”, Legal Education Society of Alberta — https://www.lesaonline.org/samples/61836_07_p1.pdf
Centre for Public Legal Education Alberta — https://www.cplea.ca/
Legal Aid Alberta — https://www.legalaid.ab.ca/
This article is information, not legal advice. For advice on your own situation speak to a lawyer; for debt that goes beyond the mortgage, speak to a licensed insolvency trustee.
Frequently asked questions
What are my options if I am behind on my mortgage in Alberta?
Nine realistic ones: catch up the payments, ask the lender for new terms, refinance, take a second mortgage, sell it yourself, sell with the lender's agreement, a consumer proposal, bankruptcy, or hand over the title. Four keep you in the home, and the list gets shorter at each stage of the court process.
Can I still refinance once foreclosure has started?
Sometimes, but it gets harder. Refinancing needs real value in the home, income you can prove, and a lender willing to say yes — and court papers registered against your title make that agreement much harder to get. It closes entirely once the court makes its final order.
Should I talk to a real estate agent or an insolvency trustee?
If the problem is the mortgage and there is value in the home, an agent can tell you what it is worth and what a sale would leave you. If what you owe goes well beyond the mortgage, speak to a licensed insolvency trustee first — filing stops creditors immediately and changes what the property decision even is.
What does handing over the title mean?
You agree to transfer the home to the lender without a sale. It ends the process at any point and you walk away with nothing, so it makes sense only where there is no equity and no realistic way to catch up.
Need help understanding your situation?
The most useful thing you can have right now is an honest number: what the home is worth today, and what would be left after the mortgage, the arrears and the costs. Ryan can help you understand where the value is and what your options are.
Talk to Ryan