It has been more than a year since Hurricane Sandy struck and devastated the south shore of Long Island. As a resident of Freeport, living one block from the water, I experienced first hand the impact of the storm.
After the initial shock of the storm subsided, I realized that many people’s financial lives would be changed forever and we learned some harsh lessons.
In fact, I have helped a number of families who were forced to file bankruptcy as a direct result of the storm.
These people suffered extensive damage to their homes in the form of flooding and not surprisingly, did not receive adequate compensation from their insurance carriers.
People were forced to rebuild on their own using savings or credit. Either way, the financial strain was too much for many.
Evicted by Sandy
It’s unbelievable, but more than a year later, I am still seeing people suffering as a result of that terrible storm.
A few weeks back, on a Friday evening, I consulted with a family who were facing eviction in 48 hours. They were forced to relocate in November of 2012 as a result of the storm.
Thier apartment was destroyed and because of this, needed to move so the landlord could complete renovations and repairs. Their cars were destroyed, wages were lost and their lives were turned upside down.
Any compensation received from their insurance and FEMA needed to be used to relocate in the form of security deposit and up front rent.
This family was essentially evicted by the storm. They were set back financially and were never able to recover.
Evicted by the Landlord
Fast forward one year and this family is facing another eviction, this time by their landlord. They came to me in a frenzy on a Friday evening facing eviction in 48 hours.
Now, I have previously stated that I am not a fan of emergency bankruptcy filings. In fact, I have refused to file these types of cases in the past.
This one, however, hit close to home and tugged at me. I call myself a hypocrite.
By filing bankruptcy prior to the eviction date, the debtors received the benefit of the automatic stay, putting a complete stop to the eviction proceeding.
The landlord either has to wait out the bankruptcy case or ask the court to “lift” the stay.
In either case, this family bought themselves some much needed time to make a plan moving forward.
In addition, assuming they receive their discharge, any back rent owed will be wiped out in the bankruptcy proceeding.
In this case a crisis was averted, much needed time was bought and when all is said and done, they will have the opportunity at a fresh start.
As there are so many misconceptions surrounding the bankruptcy process, I had to write this article to drive home an important point.
Yes, bankruptcy is a process used by consumers to get out of debt.
In addition, bankruptcy is a powerful legal process that offers protections to consumers not available in any other legal arena.
Bankruptcy’s automatic stay is the first line of defense against aggressive creditor action and can provide much needed time to institute your financial battle plan for the future.
Image courtesy of Chalky Lives (Flickr).