Toronto Commercial Mortgage Litigation Lawyer Helping Borrowers and Lenders Resolve Disputes

Many business owners rely on a commercial mortgage to build their real property and expand their company. Unfortunately, not every business that receives a commercial loan can fully repay it as planned. Our firm helps business owners deal with commercial litigation issues concerning their business mortgage loans — and here are a few important things to know if you are in a similar situation.

Can a Business Be Sued Over a Delinquent Mortgage Loan?

It is common practice for an entrepreneur to take advantage of debt in the form of a loan or mortgage to start, build or sustain their business. Many business owners can faithfully repay their debts, but because nobody knows what tomorrow holds, even the best laid-out plans may fall apart, leaving a business struggling to uphold its end of the agreement.

If your commercial loan is at risk of defaulting due to non-payment, a lawsuit from your lender is a real risk. A business that has fallen behind on payments will likely see increasingly aggressive collection efforts by the commercial lender, followed by a demand letter that offers them the options of paying their entire loan in a few days or being at the receiving end of a lawsuit. The business itself and any owners that guaranteed the mortgage may be sued, and the lender may attempt to initiate foreclosures.

Can a Business Owner Have Personal Assets Seized by a Commercial Mortgage Lender?

Whether a business owner is at risk of losing his or her personal assets due to a commercial mortgage dispute or not depends on a variety of factors. Your business structure and contractual details of your mortgage agreement are important aspects to help determine whether personal assets are on the line.

You may want to find out more about what types of business entities are protected under Canada’s business incorporation laws. In addition, some lenders may require a personal guarantee to provide a credit line for a business owner, which sounds like a fair requirement at the time of signing your commercial loan, but may backfire if an owner is unable to keep up with payments. This opens the door for creditors to come after one’s personal assets to remedy the debt.

What Options Do I Have if My Business Is Being Sued for Defaulting on a Commercial Mortgage?

The majority of lawsuits involving a commercial mortgage or loan are due to a lack of payment from the business owner. However, not every lawsuit initiated by a lender is fair or accurate. If you have reasons to believe your lender is being unreasonable or acting in bad faith, it may be best to work with a lawyer who can aggressively fight back to protect your interests and take matters to a court if needed.

If your business is indeed struggling with debt, you may want to consider negotiating a debt relief settlement or seek a pre-litigation arrangement. Those may include strategies such as payment reduction arrangements, short sales of distressed assets, and providing a deed in lieu of foreclosure. If all else fails, your business may also look into bankruptcy as a form of protection against debts. Always consult a commercial litigation lawyer before deciding what may work best for your particular situation.

How Can a Commercial Mortgage Litigation Lawyer Help Me?

Commercial litigation cases dealing with mortgages or business loans are nothing but simple. A lawyer who is skilled in navigating the intricacies of commercial litigation law can really make a difference in your case. Because every commercial litigation case is different, there is no off-the-shelf solution and only a highly knowledgeable commercial litigation lawyer will be able to analyze your situation and give you the advice you need to take the next steps confidently.

At Financial Litigation law firm, we focus on preserving the financial integrity of your business while helping you navigate through difficult paths. If you are facing problems regarding your commercial mortgage, reach out to our Toronto office by calling 416-769-4107. We look forward to assisting you.