Mortgage
This is the most commonly cited example of secured debt. According to industry figures Canadians across the country are living beyond their means, with 41% concerned about their level of debt and mortgage debt is continually increasing. By defaulting on your mortgage payments, or indeed any other secured loan, you are at risk of losing your property.
Car loan
For many, taking on financial support to buy a car is a necessity – especially for those who are required to drive or work or family commitments. Recent figures reveal that more than half of new Canadian car loans carry 84-month terms. When dealing with long-term financing it’s important to recognize that falling behind on payment could lead to the loss of your vehicle and could have a negative impact on your credit rating.
Rent-to-own
Going down a rent-to-own route is an alternative to homeownership for those who can’t get traditional financial backing due to poor credit or don’t have enough money for a down payment. If all goes according to plan by the end of the agreement, you’ll have repaired your credit and saved enough to secure a mortgage. However, should you fail to keep up with payments you could lose the entire investment.
Tax or government debt
The Canada Revenue Agency (CRA) has a range of fiscal powers to reclaim any unpaid tax or government debts, including wage garnishments, investment seizures and freezing bank accounts. The CRA can also register a lien on a residential home should you fail to repay these debts.