From Financial Decline To Financial Hardship
Many of us think of financial hardship as a concept rather than a state of being because the triggering facts are too confronting to process. For most people, discussing one’s financial decline, even among friends and family can be an uncomfortable experience. In today’s climate, we think of poverty and imagine wilting countries in a depression scavenging for water and food.
Unfortunately, the reality is much more daunting, with 8 million Americans falling into poverty since the inception of the pandemic. In 2020 the federal poverty rate was 11.4 percent. Most of us are on the razor edge of poverty. Consider that 56 percent of Americans have less than $5,300 in total savings.
As the stories of successful business tycoons like Richard Branson and Jeff Bezos flying into space are celebrated, it’s incalculable how many other lives have fallen privy to the sad disposition of Financial Hardship. The system must be able to provide easily accessible information on available public assistance to those who require it most.
Financial Hardship is only one of many life-altering legal contenders that can dramatically change one’s entire life. Valuable financial and public resource information and advice are essential to insightful decision-making. It should not only be sought at times of desperation but as a means to prevent further financial decline.
Financial Hardship due to Extenuating Circumstances
Craig Newman is an exemplary character whose misguided legal advice from friends and lack of reliable professional information landed him in an extreme state of Financial Hardship. Mr. Newman’s serious financial troubles rapidly developed, progressively winding him down a calamitous path involving foreclosure, eviction, divorce, and, ultimately, facing homelessness.
Amongst the 8.7 million Americans who lost their job during The Great Recession between 2007 and 2010, Mr. Newman did not escape its great demise. As those around scrambled in their mislay, he was no longer able to support his staff and operate his business. Years of determination and tumultuous business growth progressively dissipated before his eyes with no end in sight, forcing him to close his business and seek unemployment with no financial aid or job prospects within the foreseeable future. This was when online legal information was not as accessible and abundant as it is today
Overwhelmed by Financial Hardship, in a state of anxiety and Mental Depression due to the results of The Great Recession, and living in constant fear of losing his home and wife, Mr. Newman’s despair descended into hopelessness. As the months went by, his debt escalated to such a degree that he could no longer pay his bills and make timely mortgage repayments on his home. Too ashamed to file for bankruptcy, feeling indignant, and humiliated he found himself falling into a quasi-state of shock. He was facing foreclosure of his family home. Is this happening to me, he would ask himself.
Spiraling into Financial Hardship
Foreclosure and Notice of Default (NOD)
The bank holding the mortgage took legal action and filed a notice of default. Mr. Newman and his wife were now facing imminent homelessness as he hurried to find work. Failing to find a job, unable to negotiate with creditors, and in crushing debt, Mr. Newman sought the inept advice of an old friend.
His ex-colleague’s amateur recommendation was to submit to the foreclosure and then use the redemption period to live in the home payment-free until he finds a solution. As Mr. Newman and his wife lived in Texas, State Statutory Redemption Laws applied, and Mr. Newman was relieved that he at least wouldn’t have to utter the words to his wife that they were ‘bankrupt’ and near “homeless” in the same sentence.
Judicial Foreclosure
As creditors took legal action to force the sale of Mr. Newman’s property he hoped to receive some of his equity back from the sale of his home to repay his debt, Mr. Newman kept searching for a job. However, like many of the 3.8 million foreclosures that occurred during the Great Recession, Mr. Newman could no longer financially survive.
Despite the non-judicial foreclosure leniency that allowed Mr. Newman time to make loan repayments and negotiate a repayment deal with the trustee before foreclosure proceedings, it was simply impossible for Mr. Newman to collect the required funds to avoid ultimate eviction.
Deficiency Judgment
The price of the home sold at the foreclosure auction was less than the outstanding amount of Mr. Newman’s mortgage. Unable to repay the deficiency, being the difference between the amount Mr. Newman owed on the mortgage and foreclosure sale price, a Deficiency Judgment was filed, and the Newman’s faced eviction.
Had Mr. Newman sought out the guidance of a legal and debt specialist and conducted in-depth research, it would have revealed that there was an array of options he could have explored to lessen the financial blow. Presuming that he couldn’t qualify for Legal Aid, Mr. Newman denied himself access to a plethora of Free Law School Legal Clinics and Pro Bono Services.
Deed of Trust
At the least, Mr. Newman could have stopped Home Foreclosure by demanding the lender produce the original Deed of Trust. Mr. Newman was also eligible to file for bankruptcy before the foreclosure. In doing so, bankruptcy would have prevented the lender from obtaining a deficiency judgment.
Furthermore, as bankruptcy takes up to three to four months for completion, the Newman family would likely have been granted the right to remain in their home longer without paying rent or mortgage. This would have been an opportunity to financially strategize, save money, and focus on preventing falling into a state of homelessness. Through bankruptcy, the Newman’s also would have been discharged of mortgage debt preemptively.
Chapter 13 vs. Chapter 7 Bankruptcy
The Newmans wouldn’t have been eligible to file for a Chapter 13 Bankruptcy Plan, also known as Reorganization, because they didn’t possess the financial means to make repayments on an installment plan to creditors. However, the Newmans would have been able to file for Chapter 7 Bankruptcy to better manage their financial situation because their income was low enough to pass the Chapter 7 Means Test. Via straight liquidation of all unsecured debt of Chapter 7 Bankruptcy, debtors could have discharged the Newmans’ qualifying debts so that the family could quickly embark on a fresh start. Failing to consider all his available options, he and his wife had missed opportunities and fell into a state of homelessness.
Following the foreclosure, the Newmans were evicted from their home and hoped to rent a studio apartment in a less desirable part of town for what little money they could borrow from loved ones. However, still unable to find work, he could no longer afford the rental payments on their apartment, and now the Newmans were facing a second eviction by their landlord and were soon forced to vacate the property.
Outraged by Mr. Newman’s inability to manage such life-changing circumstances, Mrs. Newman filed for divorce. As Mrs. Newman’s family welcomed her home with financial support, they refused to subsidize Mr. Newman, leaving him destitute, helpless, and homeless.
Seeking Shelter & Food Assistance
Anguished, broke, and drowning in debt, Mr. Newman turned to the internet searching for answers. As he learned more about his circumstances and the options that were open to him, he realized that there were all sorts of free legal and financial information available to him through GotTrouble, a legal and financial expert online resource that provided answers and strategies to those facing Financial Hardship.
GotTrouble’s Homeless Shelter directory led Mr. Newman to find a local temporary shelter at The Good Shepherd Mission for those such as himself with no income who required shelter, medicine, counseling, and meals. Seeking refuge in a more stable housing situation, Mr. Newman connected with those around him living in similar circumstances searching for help.
Through the support of the Transitional Shelter, Mr. Newman was provided with services offering assistance in finding employment, social benefits, and the location of local Food Banks and Pantries. By obtaining the necessities of food and shelter to survive his homelessness, he was able to push himself forward and begin the path to restoring his life.
Seeking Legal Aid
Despite Mr. Newman’s extreme case of indigency, Craig finally reached out to Texas Legal Aid to officially file for Chapter 7 bankruptcy and renew his life on a clean slate. Following the advice of Legal Aid and employment services provided by the shelter, Mr. Newman was granted the opportunity to finally seek employment, obtain medical insurance again, and start rebuilding his life.
Mr. Newman’s history and current circumstances were unpredictable and frightening, but he realizes that life is a work in progress. You learn important lessons and recognize that life-changing trouble tends to lead to other troubles, and before you know it, you’re searching for all those missing pieces of your life’s puzzle that fell apart while you were too busy just trying to survive.
Life takes on a whole new meaning, and you begin to find the pieces of your life that you want to keep and say no to the ones that no longer feel right to you. GotTrouble helped Mr. Newman connect the right pieces with the right solutions and gain the confidence that he could create a different kind of life. One full of possibilities.
In retrospect, Mr. Newman views his life with hope and a lot more empathy for those in the storm of trouble. He felt thankful that he found the resources he needed and the valuable legal and financial information he needed to change the course of his life.
Access Free Legal And Financial Information And The Expert Advice That Can Help You Through Troubling Times.
As it stands, Mr. Newman continues to access the advice on GotTrouble. Not only for solutions for debt and financial Hardship but for considering different types of perspectives and counseling options. Mr. Newman even started taking classes in meditation and mindfulness. He even found an online job that paid his rent and necessities.
Mr. Newman’s spiral into Financial Hardship and its escape is only one of the millions across the country, past, present, and future. Readers may believe that their circumstances are unlikely to ever compare to that of Mr. Newman’s. Still, it’s notable to mention that millions of people who were struck ill suddenly found themselves unemployed and without health insurance during the 2020 Pandemic.
Legal resources, professional aid, tools, and information are bountiful in today’s digital world. The effects of COVID-19 are a testament that life and its potential hardships are unpredictable. Research and education are the keys to preventing further strain in times of life-changing trouble.
If your debts keep mounting and your savings are dwindling, don’t wait for legal and financial trouble to consume you and your loved ones; go online and find solutions. Don’t try this on your own. There are valuable resources available to you online.
