Think you’ve got money troubles? See what Derek and Carrie Olsen faced early in their marriage … and how they came out stronger than ever.

Within the first six months of our marriage, my wife Carrie and I experienced a traumatic financial disaster.

We got engaged, married, and went on our honeymoon while the bank was trying to foreclose on our house. We were starting our new lives together and our finances were being destroyed at the same time.

Carrie bought the property years before we met. She lived in the house for a while, then moved and used it as a rental property. She was actually making money on the arrangement for a few years and prospects were looking good. Then she had some bad renters who quit paying, moved out, and did some damage that left the house un-rentable. (Who steals a water-well pump?!)

Carrie fell behind on the payments and then got hit again; she was laid off from her job. There was no way she was going to be able to turn this thing around. The situation had disaster written all over it.

After we got married, dealing with the house became our new full-time hobby. Facing foreclosure isn’t the kind of pastime I’d recommend to anyone, but it couldn’t be ignored. This awful situation chose us and wasn’t going to be finished with us for a good, long while.

Through negotiations with the bank we learned we could arrange a short sale to avoid foreclosure. A short sale is basically like selling a house and paying the difference on the amount you still owe. Doing this wreaks havoc on your credit, but it’s not as damaging as a foreclosure.

The process was long and stressful. Banks can be intimidating, even when they are asking for something simple like your date of birth. Arranging the short sale took a year and a half to complete. Along the way, we learned a few techniques that helped keep our sanity intact and the process moving forward.

If a financially disastrous situation has you in its grips, these tips may help you make it out alive.

Don’t take it personally

A financial disaster can take its toll on your emotions and your self-esteem. But there are some things you can do to keep your sanity.

Banks offer a service and need to keep all their contracts within certain guidelines. When things go wrong, they do what they have to do. Its not personal, it’s business. All the drama surrounding the house took its toll on my self-worth. There were times when we felt personally attacked by everyone involved. The bank, mortgage lenders, and the title company were out for blood; our blood.

We felt defeated. And worse, we felt like we were being harshly punished for making an innocent mistake. I remember having that sinking feeling in my stomach that can only be caused by doing something really, really irresponsible. Getting too emotionally involved made everything more difficult.

One thing that helped us was separating ourselves emotionally from the situation. Keeping a healthy emotional distance from the disaster helped us keep our sanity and gave us clearer decision-making power during negotiations.

Banks, creditors, collectors, and the like can only yell at you so much before they have to run off to yell at someone else; it’s their job, it’s not personal. Keeping a healthy separation between you and the situation can help you make it out alive. Don’t crumble under the pressure, stay strong and keep your spirits high. A financial disaster doesn’t have to shape who you are as a person. You don’t have to wait for it all to end before returning to being your true self.

Reply quickly

Do everyone (including yourself) a favor and be as helpful as you can be. Don’t be the reason the process takes longer than it should.

Time is of the essence when resolving a financial disaster. We received requests for information in the mail almost every week. From something as simple as employment verification to detailed financial information. The bank wanted to know everything about us. These letters were very official looking and often felt intimidating. The walk to the mailbox gave me anxiety for months.

The short sale process can take a long time to complete. In fact, it was taking so long that the threat of the deal falling through was always looming. The house was scheduled for foreclosure and the date was only a few months away. If a deal wasn’t finalized quickly, the house would have been foreclosed. All those months of hard work and stress would have been for naught. We weren’t going to be the reason why the deal didn’t go through.

Carrie and I made a deal with each other that we would reply to the banks requests immediately. There were days when we would check the mail, sign the papers, and drive to the post office to return the mail the same day it was received. Even if we had plans to do something else that night, we would cancel and deal with the bank first.

This policy of self-denial might sound like a recipe for marriage disaster. After all, couples need to escape the madness sometime. But in reality, we enjoyed our evenings and weekends more knowing that we were doing everything we could. When the odds are stacked against you hitting the ball back to their side of the court quickly helps keep things moving forward. When the bank can tell that you are working hard to cooperate they will appreciate it and give favor. (They might not admit this, but it’s true.) Do everything you can to make their job easier and they will help you out when they can.

Face the fight head on

There were so many days I wanted to hide my head in the sand and make it all go away. But I knew that ignoring the problem wasn’t going to work.

We did have the option of throwing in the towel and letting the bank foreclose. Doing this would have been easier, in a sense. Some days that option sounded better than dealing with the endless paperwork and negotiations. We learned that when facing an unavoidable situation, no matter how much you would rather turn the other way, facing it head on is the best way to get it taken care of.

Lose the battle, win the war

We lost many battles but learned some valuable lessons about winning the war. The short sale arrangement included us paying around $16,000 in cash to the bank. Fighting the banks for a smaller dollar amount just wasn’t an option. We knew we would lose that battle so we didn’t even try to fight it.

The short sale hurt, but not as much as a foreclosure would have. We were willing to lose the short sale battle in order to win the war against foreclosure. We survived, we weren’t bankrupt, and we haven’t had any negative repercussions as a result of having the short sale. A foreclosure would have done major damage to our credit report, a short sale only left a few bumps and bruises.

It’s been four years since the short sale was finalized. In just a few more years the short sale will drop off our credit report forever. We are already planning to celebrate the day it disappears.

I hope we never find ourselves in such a gut-wrenching situation again. But you never know what life is going to throw at you. If we do find ourselves in a tough spot, we can lean on these lessons learned to help us make it out alive.

Derek and Carrie Olsen write about money and marriage at DerekandCarrie.com.

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