We all fall on hard times.

All. Of. Us.

Even some of the world’s wealthiest people have made and lost fortunes. But many, facing tough times and having to start over from nothing, were able to bounce back and remake fortunes again.

In today’s economy, even the formerly stable public sector here in Ottawa isn’t immune to cutbacks and downsizing.

My point is: everyone experiences tough times. You’re not the only one.

Homeowners looking to refinance

Listen, if you’re a local homeowner who’s fallen on tough times, the first thing you should do is call your local Ottawa mortgage broker. I can:

• Give you credit guidance and advice on how to handle creditors.
• Devise an orderly payment of debt
• Refinance your home to help provide relief
• Connect you with the right people to help support you like financial consultants and bankruptcy trustees.

A good mortgage broker can also approach your mortgage lender and insurer to explain the situation and work with them to keep you in your home. The average foreclosure costs your lender and insurer around $75,000, so they should be open to finding solutions to keeping you in your home, rather than taking the time and spending the money to foreclose.

What if you’ve lost your home?

First, some hard truths: You won’t be able to go back to the lender you defaulted with.

If you declared bankruptcy, it’ll take two years of re-established credit from the date of discharge and two trade lines of credit (such as a secured credit card and car loan) over 24 months.

The biggest piece of advice I can give you is to always, ALWAYS make your minimum credit card payment. The credit bureaus will forgive you for being late on a utility bill, but not for missing a credit card payment.

Recovering your credit

After overcoming the initial financial difficulty, we want to start working together to re-establish your credit worthiness. Along with establishing the two lines of credit mentioned above, we want to start building your savings. It’s a good time to invest in an RRSP or look into applying for an investment loan.

Besides, you’re going to need a minimum 10% down payment to purchase your next home.

Look, if you REALLY want to buy a house before the two year period after discharge is finished, it can be done, but you’ll need a minimum 25% down payment.

My Advice

Whatever you do, don’t think your financial difficulties will just go away. They won’t magically resolve themselves. The sooner you address the situation, the sooner you can be back on the road to recovery.

Often times, people wait until they feel they’ve run out of options. They wait until they’ve lost their house, or have to declare bankruptcy. In almost EVERY case, those consequences could have been avoided if they only sought help sooner rather than later.

Start by calling your mortgage broker. I’ve helped so many people.

I can help you.