The recession and collapse of the housing market caused plenty of financial damage to New Jersey residents. Then Hurricane Sandy blew through the state and became the second most costly natural disaster in the United States. More than a year has passed since Oct. 29, 2012, and thousands of people still cannot get back into their homes after the devastating storm. Filing Chapter 7 bankruptcy could give some families the opportunity to eliminate debt and rebuild their financial lives to get back on their feet.
One family that rode out the storm not far from New Jersey is among those still struggling with housing issues. Thousands of dollars have been paid to them through insurance to repair their home, but thousands more are needed. The money woes do not end there, however.
In the six months following the storm, the Staten Island family's mortgage lender suspended their payments. Now, the lender is demanding that payments resume and those missed payments be made. The alternative is foreclosure. In addition, the family borrowed money to replace items lost in the storm that insurance failed to cover.
The family admits to making financial mistakes in the aftermath of the storm. Those mistakes amount to their monthly expenses being nearly $3,000 more than they bring home. Even when their mortgage payment is excluded, their bills are still more than they make. For now, the couple has decided to circle back and try again to deal with insurance claims and mortgage modification.
For many New Jersey families in a similar position, the time for renegotiating may be over. Filing for Chapter 7 bankruptcy could provide families with much-needed relief from creditors and the stress of being unable to pay bills and live at the same time. Having the opportunity to eliminate past mistakes and rebuild financially could begin the process of putting the devastation of Sandy in the past.
Source: CNN Money, After the flood: Family still struggling post-Sandy, Brett Forrest with Lisa Gibbs, Dec. 16, 2013