An Emerging Poor May Mean An Emerging Need To Walk Away From Your Home Mortgage
So in case all of you haven’t noticed, it looks like there’s a new class a people emerging in this great country of ours. No, it’s not cyborgs or anything cool like that because, well, like life has taught all of us, the things that most reasonable people want almost never come to fruition. And all you’re left with are the douches who get their way, and the trends that rule the day are always so undoubtedly lame. Nope, this nascent class is none other than an increasingly bigger pile of brand-spankin’ new poor people and according to the New York Times, they number in the millions; and best of all – they’re here to stay. Sigh… doesn’t that just beat all? Why can’t it ever be something cool?
According to the article, millions of Americans have been unemployed for quite some time now, either from being laid off, terminated, or any other way in which one can lose their livelihood. Well, now these Americans’ unemployment benefits are beginning to come to an end, which means the estimated 2.7 million of them who have yet to secure new employment now face the possibility of having to find a way to live without a regular income.
What comes next? Logically, it means dwindling down any savings they have left, liquidating your 401k, seeking help from family and friends, and if it still isn’t enough, registering to receive public assistance. There’s just one problem: these unfortunate people have already been doing that, as common sense and life experience will tell you, unemployment benefits are not enough to sustain a person or a family for long. Naturally, tapping into all of the aforementioned resources and more were already necessary for this emerging group of people to survive.
Anyway, this story got me thinking of the repercussion that generally accompanies unemployment. Having a lack of money is obvious. But to a larger extent, it also means being unable to make payments on the necessities in your life, such as student loan payments, car and insurance payments, but most of all, mortgage payments. It’s an old story and everyone knows where it leads: to the breadlines and the street.
But what can be done to stem this? Usually the best thing to do is to sit down and begin trimming the fat to ensure you stay afloat financially. But where does one who’s in this new class begin? Well, how about your house. Yes, I’m switching to addressing you, the reader, instead of a third party because… it’s just easier, alright?
It’s been talked about a lot, but with an estimated 1 in 5 homes being valued at less than their purchase price, defaulting on your mortgage payment and walking away from your home might not be such a bad option.
From a legal standpoint, the practice may seem immoral, but it’s not necessarily illegal. Corporations do it all the time when they walk away from bad business and property investments. Heck, the banks do it all the time, hence the current state of American banks. So why shouldn’t you?
Now I’m not telling you to immediately dump your house without any forethought, but it’s something that you should consider. If your house is already worth less than what you paid for it, then all you’re doing is dumping more money into something that isn’t worth it, perpetuating a destructive cycle that will only result in you having less money and an increased risk of needing to eat at a soup kitchen.
It’s no surprise that the latest LegalMatch statistics show a spike in requests for estate lawyers. People need to plan for their retirement, as well as their children’s future. Part of that process is sitting down with someone who can help them figure out how to secure both.
The number of people living below the poverty line is increasing every day. All I’m suggesting is that if you’re in that risk group, don’t think walking away from the so-called “American Dream” of homeownership is a mortal sin. But remember, if you do decide to do it, be sure to sit down and really examine your finances first, as well as talking to an expert who can help guide you through the process.