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“I know when I was in practice, and I was in practice 25 years, when the clients came to see me we were months down that road,” says Mr. Leclair. “There were a number of issues to be dealt with at that point.”

Clients would usually show up at his door “when their back is against the wall” and a power of sale has already been started by the financial institution.

If you are in arrears — generally described as having missed three monthly payments — the bank can initiate a power of sale against you and put your property on the market. If your home sells for less than your loan, you’re still on the hook for any debt outstanding plus legal fees for 20 years.

“Banks get upset when you ignore them,” said Mr. Leclair, noting financial institutions are less likely to renegotiate your payment terms at this point.

Younger Canadians, those who are 18-34 and likely to be first-time buyers, seem to have the least understanding of what to do during a cash crunch as 74% said they had no idea what their options were if they couldn’t make a payment.

The survey was conducted from April 30 to May 1, 2014, online with 1,510 randomly selected Canadian adults. The margin of error was plus or minus 2.5 percentage points, 19 times out of 20.

Mr. Leclair says foreclosure, a court sponsored process, is something banks will try in a rising market like today because they can take your property and profit. You might have a $100,000 mortgage and they sell it for $150,000. Other creditors might also have to compete for that money, but chances are the excess won’t end up in your hands.