Are you a home owner or a tenant ? Dealing with debts during COVID-19 pandemic

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Introduction

The COVID-19 pandemic has created turmoil in people’s lives for a long time. The real estate industry is no exception. Owning or renting a home can be an expensive undertaking during this pandemic. Other than the initial down payment, when you own a house, there are other payments like legal fees, closing costs, property tax adjustments, mortgage payments, maintenance and repair fees, utility bills, etc. It is difficult to manage these costs when you are also struggling with debt and financial uncertainty. Considering the renters, even though they do not have many expenses to cover, the fear of possibly being evicted because of not paying some or all the rent is equally stressful.

Thankfully, there are options and resources available to help deal with debts as a homeowner or renter during this pandemic. Fortunately, the Canadian government, financial institutions, and regulators have implemented some measures. 

A helping hand to the Homeowners

  • Canada’s banks and credit unions offer monetary relief from mortgage payments to COVID-19 impacted customers. One option is up to a 6-month postponement of mortgage payments and the opportunity for relief with other credit products offered on a case-to-case basis. Another option is Canada Mortgage and Housing Corporation (CMHC). 
  • Some cities in Canada have allowed deferrals of property taxes and utilities, ranging from 30 to 60 days, depending on where you live. You need to check with your city or municipality to collect the details. 

A helping hand to tenants

  • Tenants who requested to self-isolate or that cannot work regularly might have difficulty affording their rent. Financial support measures for the tenants or renters include money for emergency housing needs, interest-free loans, rent reductions, Money for Home Energy Conservation Supplies, etc. 
  • British Columbia, Manitoba, Nova Scotia, Ontario, Quebec, Prince Edward Island, and the Northwest Territories suspended rental evictions. 
  • The government of British Columbia offered $500 a month as assistance to renters who have lost income due to COVID-19. 
  • Financial assistance programs to help people and their families are also used to manage their incomes and debts during the pandemic. 

Are there alternate options?

Apart from the government-assisted financial programs, here are the alternate options for homeowners and tenants to tackle their debt problems. 

Lending options 

  • If you are a homeowner, you have the chance of refinancing your mortgage. Your bank loans you money based on the value of e your home. Then you own $50,000 of the house. This is known as “equity.” This is called a second mortgage or Home Line of Credit.
  • Consolidation loans are another option that owners and renters have. The consolidation loans allow you to combine all of your monthly payments into one, making it easier to pay them all at once. 

It is sad to realize that using the lending options to make ends meet during an extended period of financial difficulty will lead to debt problems in the future and impede your recovery. 

Insolvency and Bankruptcy alternatives

If you come to the point that there are no solutions to your debt problems, try reaching a Licensed Insolvency Trustee for a credit counseling session. You can discuss your overall situation, expenses, and income options with your counselor and develop solutions like DMP, debt settlement, Bankruptcy, or Consumer Proposal. Contact Dana MacRae – Licensed Insolvency Trustee, for the session.  

Debt Management Programs (DMPs) arrange to pay off your unsecured debt in one monthly installment based on your budget. This payment is paid to the credit counselor from your end and handed over to your creditors based on a pre-arranged deal. Your creditors should agree to this revised payment schedule and decrease or waive the interest entirely to help you repay your debts. It is the responsibility of the Credit Counsellor to explain this program. Dana MacRae | Licensed Insolvency Trustee is happy to offer you free debt and credit counseling services.

A debt settlement is a process in which you contact your creditors and offer to settle your debt for a lump-sum payment more minor than the outstanding balance. Not all creditors welcome this option, so it would not be easy to negotiate it independently. Hence, you can get support from a Credit Counsellor. Contact Dana MacRae, Licensed Insolvency Trustee, and book online for a free and confidential consultation or call 1-800-665-9965 for information.

A Consumer Proposal is a legal procedure that a licensed insolvency trustee can only administer. The trustee’s job is to send your creditors a “proposal,” asking for less than the total amount of your debt. A proposal can proceed if at least half of your creditors agree. Do you want to file a consumer proposal? The Licensed Insolvency Trustee – Dana MacRae, is here to help you with free and expert pieces of advice. 

Bankruptcy is also a legal debt solution; however, it can only be administered by a Licensed Insolvency Trustee. Bankruptcy is a fresh start by liquidating assets to pay their debts or creating a repayment plan. Are you planning to file bankruptcy? Contact Dana MacRae – Licensed Insolvency Trustee, for more information. 

Conclusion

If you struggle with debt and need debt help in Ottawa or other locations in Ontario, you are right. Whether you are a homeowner or renter, having someone near you when dealing with debt during a crisis can make all the difference. Dana MacRae – Licensed Insolvency Trustee can get your credit and debit under control again. Call for a free and personal consultation at 1-800-665-9965. You will feel comfortable once you know how you will get through this difficult time and understand what you can do to improve your financial situation in the future.