Sometimes Bad Credit Happens To Good People

Jack and Dianne.

Tommy and Gina.

David and Anna.

Small town couples with bigger dreams. Little houses and picket fences just like you and me.

The only difference is David and Anna* are real. *not their real names

This is their story.

They had decent jobs when they got married around twenty years ago. Lived in rented spaces with happy faces. Along came the kids and they wanted a house. More space for the happy little faces.

The little house they found was perfect for them.

With a lot of sweat equity they managed to double the value of the little house over the course of time. Mortgage free by 45 was the plan.

A bigger house would be nice, but this was theirs. Their little house.

David and Anna went back to school so they could get better jobs.

Anna quickly found full time work as an Administrator. David found part time casual work in Construction. Frequently he would be on longer projects. When they were both working, the money flowed and bills were paid and life was good.

The door was always open on their little house and everyone was always welcome.

The kids were growing and the little house was always alive with activity.

They even found time to volunteer in the community to give back.

Life tottled along quite well.

Then David got hurt.

Not at work.

Anna's benefits covered his meds, but he had no sick pay. David worked when he could, and Anna tried working a second job for a while, but her health began to suffer too.

They paid the bills with credit. And when the credit ran out they consolidated.

But, they never missed a payment on their little house.

David still worked as much as he could, but that depended on how well he was feeling, and on the phone ringing.

Again the bills piled up. This time, they took out a second mortgage on their little house. All the work they had done earlier paid off now. They had less than 5 years left on their first mortgage. All they had to do was make it another 5 years.

Then David got sicker, but still worked when he could. He never gave up. Anna did what she could. Worked overtime when she could, and cut corners where they could be cut. They would get by.

The money may have slowed, but the bills didn't. The phone did ring, but it was bill collectors. They didn't answer the phone if they didn't know who it was. The stress made David sicker. Anna became depressed.

Soon, everything they made went to paying the debt. Nothing left over for food and utilities. Vacations and cars were a dream. It seemed bankruptcy was inevitable.

They would lose their little house.

But even with two mortgages, they still never missed a payment on their little house.

The bankruptcy laws would allow them to keep X number of dollars based on how many people were in the little house. But it wasn't enough to pay the bills and and keep the little house. Also wasn't enough for rent and utilities on someone else's little house.

That's right, they couldn't afford to go bankrupt!

The next solution was called a consumer proposal. This is where you just go bankrupt on unsecured debt. Credit cards, consolidation loans, personal loans and the like. This seemed like the only way they could keep their little house.

Dave and Anna could breathe again. The bills were paid, the harassing phone calls stopped, and in less than three years the first mortgage would be paid!

Dave was feeling somewhat better and could work more, and did when he could. He was still dependent on the phone ringing, but at least he was in better shape, and less worried about the bills.

Then the roof caved in. Literally.

A series of crisis piled up.

A winter storm felled a branch on their little house, and the insurance didn't cover it all.

Catastrophic illness and death of family members coincided with a slip in David's health.

Another family member became homeless and David and Anna took him in.

The car and the truck both broke down. The car couldn't be repaired.

They got through.

There's a roof on their little house and food on the table.

They still never missed a payment on their little house. They now had less than a year to go on the 1st mortgage.

David was well enough to work more and was ready for the phone calls.

Except the only calls were from the bill collectors.

Now a new plan. The first mortgage on their little house is so small, that if they could refinance and roll the two together, they could live on Anna's income alone.

They talked to the bank. Bad credit, no dice.

They talked to a mortgage broker, same story.

They talked to the existing mortgagors. Nope. Because if Dave and Anna default, they'll get their money back easily. There is 10 months left on the first mortgage!

So there they sit, in their little house.

The mortgage vultures circling overhead...

...and they never missed a payment.

DJW