It Looks Like I might Lose My Home... What Are My Options?   By Laura Dawn Lewis Excerpt from Laid Off, Now What?!? Thriving Financially through Unemployment

Updated March 2, 2010

If your rent or mortgage is more than the amount of unemployment you receive, you can easily find yourself in this situation within three to six months.  Create a worst-case scenario plan now so if you do find yourself unable to pay your mortgage or rent, the only thing you lose is the current roof over your head.  Your family, your sanity and your well-being are far more valuable.  Planning for 'just in case' is the best way to be prepared should this become your reality.  Currently nearly 20% of Americans are in this reality. It's nothing to be ashamed of.  Almost everyone today in the United States knows someone who has lost their home or apartment during the Great Recession.

What to expect: If you're losing your home to foreclosure, given the glut on the market, you may have up to two years before they bank officially evicts you.  During 2009 and 2010, there is a huge backlog of foreclosures and many have been held back as not to affect holiday retail sales.  If you're in a foreclosure situation, stay as long as you can.  If you've decided to let the house go, use that money to pay down your other debts and living expenses. Then consider yourself lucky. Several people interviewed have been able to stay in their homes up to 2 years rent free before the formal eviction. They used this time without house payments to catch up and start over.  Because the bank takes the house, they were not forced to pay back the money for those months. 

Renters do not have the same advantages as homeowners, nor time.  If you're in a large apartment complex owned by a corporation, you will have roughly 45 days from the date of your first eviction notice to get out and you will have to pay back all back rent and legal fees incurred.  The good news is, if you keep to the payment schedule the courts require, the eviction will not show up on your credit and nobody but you will ever know.  However if you fail to make one of the payments or are late, the whole thing goes public.

In most cases, this will be preferable to attempting to get out of your lease.  The fact is, they're going to charge you for two months rent either way so you might as well gain by actually living in the apartment rather than vacating and still having to pay.  There is the possibility that once you vacate the landlord will re-rent the unit quickly and you'll only be liable for the days it was not rented. If you're in a highly desirable location with very low occupancy rates, this may be your best bet. In most cases, this will not.

The process of eviction: Once you reach court, the landlords will try to get you to pay all the back rent, (usually 2 months plus legal fees) that day to forestall the eviction or offer you a payment plan requiring you pay all back fees within 12 months.  You do not have to accept this.  Renegotiate for an amount you are comfortable with and extend the time allowed.  Be aware, you will not be able to make these payments by check.  You will have to pay in money orders which means no grace period.  Be cognoscente of when you receive income so you don't short-change yourself or get into a situation where paying your old landlord gets you behind on your rent with your new landlord.

In most cases if you're dealing with a major corporation, they don't care and they will not work with you. They just want you out. Private owners will usually work with you.  It's much harder for them to find a good tenant and the time the house or apartment stays open can impact them heavily.  Because of this it is often in a private owner's best interest to keep you in the unit. Work with that. As for the corporations?  You're just a number and a line item in the revenue column.

If you're being evicted from a rental, once the court date has been set, unless you have a windfall, start looking for a place to move.  You'll have 10 working days after the court hearing to get out. Most court dates are within 21 days of the notice meaning you've got about 30 days to find a new place, move and come up with the cash to do so.

Your options

Moving in with relatives or Friends: There is about a 6-month threshold for relatives and 3-months for friends. Parents often will allow you to stay up to a year but know this is temporary. Within a few weeks the novelty will wear off and your family will start treating you like a child again. At this point, you’ll be able to cut the tension with a knife. So many 20-to-40 somethings have been forced to move back home with their parents, there’s even a name for it: Boomerang Kid.

There will come a time, after you’ve moved in with friends or relatives when they’ve had enough and you’ll need to move out. This is tough on everyone. You feel pressured. They feel guilty but want their life back.

Once re-employed, plan on using the next two-to-three month’s worth of paychecks to catch up on back bills and payments in addition to amassing the required deposits and finding a new place to live. Your relatives, knowing you now have money coming in may want a share of it, particularly if they’ve been supporting you for several months. This will prolong the time it takes you to get back on your feet, and heaven forbid you lose your new job within the first 90-days. If you’ve been collecting unemployment before, you may not be eligible for it again. And if you were unemployed for most of the past year, you still may not be eligible. The amount you’re paid is based upon your salary six-to-twelve months back. The federal extensions implemented in 2008 and 2009 mitigate this. These extensions have allowed people to continue collecting unemployment for an additional three-to-six months.

Becoming a BOOMERANG KID: You are a boomerang kid if you are between 25-and-50 years of age and due to the current economy, find yourself forced to move back home with your parents.

According to the AARP, the average stay is between 6-months and 2-years. Most boomerang kids are single, college graduates with careers. They live in major cities like San Francisco, Los Angeles, and New York, where the cost of living is enormous; nest eggs are depleted long before well-paying work can be found. Without a spouse and usually without a house, these adult children find themselves caught outside of the system in a career now on hold.

With the increase in retirement housing, adult children face a second problem. Parents and grandparents living in 55+ communities can’t take in their adult children, especially if their children have children. What in the past has been a failsafe in the event of abuse, medical issues or financial hardship, today is no longer viable because of association rules prohibiting tenants under certain ages or with children. The popularity of retirement living effectively forces family members into the street or with friends who are often in the same financial straits and have children of their own.

In previous major financial downturns, this wasn’t an issue. Historically, families merge and support each other the worse the economy gets. In today’s fragmented society peppered with homeowners’ associations, age restrictions, and tenancy restrictions, the family support system is no longer an option. This propels many people into the state systems instead of the family systems that provide nurturing, stability and support.

What can you do if you have to move back home and your parents are in a retirement community? If you’re single, you can usually go in as a caretaker. If you have children, you’ll need to have your parents, relatives or friends petition the board of the retirement community and hope you can get an exemption. As bureaucracy moves at a snail’s pace, you’ll want to start this process as far in advance as possible, ideally 90-days ahead of time.

Making the Best of a Humbling Experience

Boomeranging is humiliating for an adult child and frustrating for the parents, but it is better than living on the street. Those who have made this a successful option focus on the positive. How often do adult children get to spend quality time with their parents later in life? Most boomerang kids are well educated and talented. Many will start their own businesses, write books, or discover new opportunities. The hardest part of boomeranging is the constant nagging by parents to get a job, any job, even a minimum-wage job flipping burgers. People over 50 grew up in an era when you pounded the pavement to find a job. That strategy works for retail and commodity jobs. Anything skilled or requiring an education is better found working the phones, networking, and pounding the keyboard from home. Getting parents to understand this takes time. 

There are benefits to boomeranging, and when the frustration sinks in, focus on these. Being free from rent and utility bills offers the advantage of pursuing dreams. If you find yourself boomeranging, use the opportunity to change the direction of your life away from employee status to financial independence. It’s rare to receive such an opportunity to start completely anew. For inspiration, read the Rich Dad/Poor Dad series by Robert Kiyosaki and Sharon L Lechtr. Robert went from homeless to multi-millionaire. This series is specifically written for people tired of the employment rat race and looking to get out permanently by starting their own business and regaining control of their finances. Not only is it helpful, it will recharge your motivation and give you the direction you need to succeed.

Getting roommates: Increasingly, adults are pooling together in homes. If you have a home with extra rooms, renting these out to fill in the gaps may be your best option. However, chances are your new tenant(s) will become part of your family, and this can be stressful in itself. Be very careful about who you allow in as roommates.

In the article called Anatomy of an Internet Scam: Roommate Wanted, I detail how con-artists target roommate seekers and then take them to the cleaners with counterfeit money orders and cashier’s check. The scammers are out there and they’re prowling. They’ll state they’re from out of town or another city and therefore cannot meet you in person.

Never rent to someone who you do not meet in person first, or at least a representative of that person. When I needed to move from Saudi Arabia to England, we contacted landlords by phone, worked through an agent and had a friend in England meet with the landlords and view the properties for us as our agent. Even though they landlords didn’t meet us upfront, we were in contact and we did have a representative on the ground. We also had references, persons in the British government and other dignitaries around the world to vouch for us in addition to my partner’s and my body of work, much of it published on the internet. We spoke on the phone. We used agents and deposits were made to the agency handling the rentals, not the individuals. The point is we didn’t hide who we were and made every effort to insure the landlords received authentication of our identity. First contact may have been by e-mail, but second contact was by phone.

Caretaking or House-sitting: These opportunities exist but the competition is stiff. For every available house-sitting gig on House Careers in April/May 2009, persons requesting house-sitters report an average of 50 qualified applicants. Many of the people looking for house-sitting assignments are young, single professionals. Many of the house-sitting assignments require taking care of pets and plants. If you or a member of your family have allergies to pets, this option is not your best. Caretaker positions have fewer applicants but the requirements are generally more stringent. Caretaking requires specific skill sets from carpentry and forestry to farming and livestock care. There are other online resources for this, but these are the two we’ve tested.

Downsizing: This is tough if you don’t have income. Landlords want deposits. Your credit will be checked and you’ve got to move your possessions, which can cost hundreds if not thousands of dollars. This can also include moving to a lower rent district or subletting from an existing tenant.

Boarding Houses: There are boarding houses available. These can be found on Craig’s List and other internet resources. Many do not require deposits or long-term commitments. This option works for singles, couples, and single parents with one or two children.

Public Assistance: Most states in the U.S. as of spring 2009 are approaching bankruptcy. Social services are being cut at an alarming rate and charities are overflowing with needy families. You may be fortunate enough to get public assistance, but if you come from a middle-class family, often your possessions, including the value of your car, will disqualify you. If you’re single or married without children, your chances are even less. Priority is given to single parents with children, then families with children and the elderly. Normally there is a 60-to-90 day waiting period.

Going homeless: This can be living in your car if you’re lucky enough to have one or camping in one of the many tent cities springing up around the United States. Single adults or couples can usually manage for a few months; families with children have a far more difficult time. Personal hygiene, including washing yourself and your clothes, not to mention safety, will be the toughest aspects of this lifestyle. Getting quality food will be a problem. Without a refrigerator, you’ll have to buy as you eat. This means your diet goes downhill and you’re far more likely to get sick and suffer from malnutrition. It also means you’ll spend far more on food than if you had a home. Some cities make it easier to be homeless. Most, however, consider it a crime, meaning even if you do find a safe place to sleep, local law enforcement will probably make you move.

As you’re hoping for the best but planning for the worst, you need to articulate (preferably write down) your plans for what you will do should your worst-case scenario become reality. Make sure to consider what you'll need to do with your children's schooling and any parents you may be taking care of.  Pets as well. Planning is key.  Knowing your rights and what to expect will make even the worst case scenario a manageable crisis in your life.  The fact is, even if this happens, your pride may be bruised, but in the end, you are going to be okay.

Authors note: In the book Laid Off Now What Volume One I've included information on various programs, both public and private available to help you should this become a reality.

Related Websites
Couples Company ●  Storybook Advent ● QDreams ● BrainFit

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