I’m blessed that I don’t know this.
When a family truly hits bottom and has to declare bankruptcy, what do they do? I mean literally, how do you do that? And then what? You lose the farm, you have no job, you have children to feed…where do you go for help? What are those agencies called? What about housing? I guess a family is either homeless or at the mercy of other family members or neighbors? Low income housing? Man, just imagining this just is gut wrenching.
I had a relative who declared bankruptcy. Spending beyond their means. It was a tactic used to have debt forgiven. As long as a paycheck is coming in, it isn’t necessarily the end of the world or dire. I don’t think there lifestyle changed that much. In lots of ways, they were better off after declaring bankruptcy and having a clean slate in some ways. I guess it depends on the circumstances.
When I was in high school we had a neighbor that declared bankruptcy. They remained in their home. I do not know if they owned it outright or if they cut a deal with a mortgage holder.
If you know someone who’s struggling tell them to go to their county’s social services office and/or website to see what kind of help is available. See if they offer emergency housing and food stamps. Find the unemoyment office. I think they have computers job seekers can use. If not, the public library probably does. Ask the public school about free breakfast/lunch programs. Local churches probably have contacts for emergency help too.
For those I know, you start with a bankruptcy lawyer who discusses your two (?) options, then you select one. In one you repay less than what you owed on a payment plan. In the other you lose a bit and start renting or whatever is open for you.
Then you go out, keep spending esp when credit cards offer you more cards, get a brand new car and be happy with a 16.9% interest rate (guessing on the exact rate, but it left me agasp when I heard it), make sure you support the lottery, complain about all the problems there are with living off charities and the gov’t, and pretend to look for a job, but none that are offered are the “right fit” so you keep looking or at least say you are looking. If you happen to get some money from somewhere you hide it so it doesn’t show up. Bartering helps. In a few years you declare bankruptcy again because you finally figured out you couldn’t pay for the credit cards and car. Time will tell if that one stops the spending, but I’m not holding my breath. I know the lottery is still being supported.
The first paragraph I’m pretty sure about. The second I’m hoping I’ve seen anomalies rather than what’s typical. I only have three data points and two fit it, one doesn’t. (That one was due to medical bills rather than spending.) I’ll admit it’s jaded me a bit about the system.
I don’t know anyone in the exact situation you are describing. That’s a lot!
I have a brother who was in very bad straits, barely keeping his head above water financially and on an organ transplant wait list. He was able to get on disability which played a large role in keeping him from being homeless. He is doing alright now, post-transplant, and semi-retired.
I have another brother who was recently evicted from his apartment, when his start-up failed, but luckily he had an old friend who took him in. He was very worried about being out on the street. But yes, I guess that’s when you call family members.
2 of my BILs were really struggling. One was unemployed for an extended time and couch surfing for awhile. The other had to have two brain surgeries for a congenital deformity and has never been the same since. He is on disability. Their now ex-wives carried the burden of supporting their children.
I have one friend who declared bankruptcy after the crash in 2008. Her H was out of work for over 1.5 years & grad school loans were crushing them. Colleagues of her H were telling him he was really up against it because they were being advised by their bosses to not consider anyone for employment who had been out of work for more than six months – which, wow, strikes me as so unjust in light of the magnitude of the Great Recession. The biggest advantage to the bankruptcy, for them, had something to do with their underwater house.
She lived in the same economically depressed city that I live in now, and the housing prices have still not recovered from 2008. If I remember correctly, the bankruptcy allowed them to continue to stay in their home, making mortgage payments, but the bank could not come after them for the balance due. The way she described it was almost like a pre-arranged short sale. And indeed, when they decided to buy a home in a better area closer to her H’s new job, they essentially handed the keys to the bank.
I was working in hospitality at the time of the Crash in 2008 and we would get applications for bartender, host, server from grown men who had lost their white collar middle class jobs. The company would not even consider hiring them bc it was obvious they were looking for something temporary and would move on as soon as something better came along. It always make me feel sick to my stomach – the idea that you just wanted to WORK and support your family but “lower end” jobs were not going to give you the time of day. Over-qualified is a thing.
I wish your family member well.