The following stories are true.  Names and locations have been changed to protect the identity of those involved.

Disclaimer:  Housing and Credit Counseling, Inc. and its employees or agents are not in any form legally responsible for their clients’ actions.  The purpose of the services HCCI provides is to help clients find alternatives and solutions. The final decisions are the responsibility of the client. These stories are intended to offer general information of interest only and are not intended to replace or serve as a substitute for any professional counseling or other service.

 Client Stories

Behind on House Payment and Facing Foreclosure

Marsha came to HCCI because she was behind on her house payment and was facing foreclosure.  Marsha had a gambling problem and was spending her house payment, utilities, insurance, and car payment money at the casinos.  HCCI’s counselor reviewed her budget to determine how much money she had to work with and found, after going over her budget with a fine toothed comb, that she actually had a surplus.  The counselor called Marsha’s mortgage company to see what could be worked out in order to save her house. The mortgage company agreed Marsha did have a budget surplus and they agreed to a repayment plan. Marsha was to maintain her normal house payment and in addition pay an extra $100 a month towards the arrearages.  HCCI then set up a plan to pay a little extra on her utilities to prevent shut off.  The bank agreed to defer her car payment to the end of the loan if she would at least pay the interest for the missing payment. Marsha had just enough money in her budget. HCCI then referred Marsha to another agency to get assistance for her gambling addiction. Now, after 6 months, she is current on her house and car payment.

Medical Hardship

“I was personally amazed at your knowledge of home loans and bankruptcy matters, in addition to your knowledge of the whole foreclosure process.  And your two phone calls to our lender were equally impressive. You are a true professional in the area of consumer credit counseling.  Thanks very much for your advice, care, and compassion.” This is an excerpt from a letter Dave wrote after the first counseling session.  This is his story:

Dave was counseled over six years ago but in some ways it was an indication of circumstances counselors often see in our current economic downturn.  Due to medical hardship, Dave was unable to stay current on significant secured debt obligations and was interested in pursuing a Chapter 13 bankruptcy option when he first visited HCCI.

In late 2001 HCCI counseled Dave who had been the largest volume salesman at a large volume regional business for five consecutive years.  His income was large enough that he could support private college tuition for his son via a parental PLUS loan, a car payment for his son’s car and two mortgages on his home.  Dave’s income came to an abrupt halt when he needed back surgery and was unable to work for at least six months due to the strain long hours of standing put on a fragile, healing spine. Budget numbers revealed he now had a nearly $900/month deficit, prior to monthly repayment of medical bills, and his wife’s income was not enough to support the monthly household budget.

When Dave first came to HCCI, he was 120 days behind on his mortgage, 30 days behind on his car payment and had placed the student loan in deferment.  After multiple visits, short-term phone counsels and several calls to his primary mortgage lender, Dave left the office with hope and began documenting and filing a hardship forbearance request with the lender.  The request involved budget and income documentation for the lender along with an employer letter confirming Dave’s average monthly income as well as the employer and physician expectations that he could resume work in three months.

Many months later Dave and his wife had avoided a Chapter 13 bankruptcy filing (though that option was thoroughly explored as well), got caught up on their car payments, put the student loan in deferment and Dave was getting ready to resume work.  Their mortgage forbearance deferment had been approved and they had gotten a cash gift to catch up on his mortgage.

Behind on Mortgage

Art and Sherry were three months behind on their mortgage when they came to HCCI.  They had filed for bankruptcy a year earlier but had kept their home out of the bankruptcy.  They felt they could bring their house payments current since they no longer had to worry about all of the other bills. However, a loss of income prevented them from being able to do so. Art and Sherry were able to make the regular house payment every month, but could not pay off the past due amount.  In addition, the fees for late payments were starting to add up.

After struggling with payments for over a year, Art and Sherry came to HCCI. Their counselor contacted the mortgage company and got the mortgage company to extend the loan period and add the past due amount to the end of the loan. This allowed Art and Sherry to continue making their monthly payments.  Their loan was brought out of default and kept Art and Sherry from going into foreclosure.  They no longer had to worry about late payment fees adding up and the mortgage company no longer had to worry about loosing money on the loan and going through a lengthy foreclosure proceeding.

Work Related Injury – Contemplating Bankruptcy

John and Marie came to HCCI after John had suffered a work-related injury.  Eventually the injury resulted in John having to leave his job.  They thought they could manage their debt themselves but found themselves struggling to keep up with creditor payments on a reduced income. John and Marie considered filing for bankruptcy and went to an attorney. The attorney referred them to HCCI for counseling.  Following counseling, John and Marie were able to set up a budget, work on tracking their spending and set up a Debt Management Plan that helped reduce their monthly creditor payments and interest.  John and Marie stated that some of the things they found most helpful in working with HCCI were “we were able to stay on a budget, did not have creditors calling us at all hours and knowing that our debts were being paid and finances were being stabilized.”

Unsteady Income and Had to Use Credit Cards to Pay Bills

Jodie came to HCCI for credit counseling.  She had a very unsteady income and ended up paying several normal living expenses with her credit cards.  She found herself unable to keep current with the credit cards bills.  She was so strapped for money that she hadn’t even paid a bill for four months.  Jodie had recently moved back in with her parents and found a better paying job with a steady income.  HCCI worked on budgeting with Jodie and discussed ways to reduce her expenses in order to set up a Debt Management Plan.

After Jodie had been successfully paying down her debt for over a year, her father came to HCCI for assistance, hoping we could help him in the same way that we had helped Jodie.  Her father praised the work we had done with his daughter.  He said that nothing he had told her regarding finances seemed to stick, but after visiting with HCCI, she had completely changed her attitude and habits regarding money.  Before Jodie came to us, she was relying heavily on his assistance.  He said that by getting his daughter the help she needed not only improved her financial situation, but also improved his financial situation!

Local Company Laid off Significant Portion of Workforce - Uncertain of Future

After a local company laid off a significant portion of its workforce, HCCI participated in a Dislocated Workers Resource Center.  It consisted of a group of Social Service Agencies that got together so employees affected by the layoffs could come to one central location to get the resources and assistance they needed.

HCCI provided assistance on how to set up an emergency budget and discussed prioritizing expenses in order to eliminate or reduce any unnecessary spending.  HCCI discussed ways to reduce monthly expenses such as cutting back on grocery expenses by making a weekly meal plan and using this list to create a shopping list to reduce impulse purchases.

With the uncertainty of future income, many considered selling their home, needed to sell their home to relocate, or couldn’t make payments and were considering abandoning their homes and letting them fall into foreclosure.  HCCI discussed options that may be available to allow them to stay in the home – a repayment plan, a temporary forbearance (such as a short-term reduction in monthly payments), or a loan modification (permanently changing some term of the loan such as the repayment period or interest rate).  HCCI also discussed their options if they found it necessary to sell their home or walk-away from their home without foreclosure – a short-sale (where the mortgage company may be willing to approve a sale on the home for less than the amount needed to pay off the mortgage) or a deed-in-lieu of foreclosure (where the borrower voluntary turns the home over to the bank and the bank can avoid a lengthy and expensive foreclosure). These alternatives to foreclosure will often help the client avoid owing money to the bank even after the home is no longer theirs (if say the bank could not pay off the loan after selling the house through a foreclosure).

HCCI was able to help one gentleman almost immediately.  The HCCI counselor called a personal contact at his own mortgage company and was able to get a temporary forbearance set up that reduced his monthly payments to half of the original amount which allowed the gentleman time to get his finances in order and search for employment.

Single Dad, Recently Divorce, Having Difficult Time Making Mortgage Payment

John came to HCCI for counseling on his mortgage. He was a single dad, recently divorced and had gotten the house in the divorce. The mortgage payment, while affordable for a two-income household, became too much for him to manage on his own. John also had a higher valued home that had been on the market for 9 months without any offers. Eventually John could no longer afford living in the home and moved into an apartment with his children. He didn’t want to ruin his credit and struggled with trying to make payments on both the apartment and home while waiting for it to sell. After several months of paying expenses on both, John was no longer able to keep up with the house payments and the loan fell delinquent.  Even after reducing the asking price on the home several times, he still could not get an offer to take to the bank. When John came to HCCI he was very stressed and upset about the situation. The bank had been trying to work with him, but now John was in foreclosure. HCCI contacted the bank’s attorney and were able to work out a deed in lieu of foreclosure (the client voluntarily turning the home over to the bank). The attorney mailed the necessary paperwork to HCCI. John come into HCCI and he and HCCI’s counselor went through all the paperwork together, helped John answer any questions regarding the process and got him answers to the questions we couldn’t answer. The attorney and the bank were very impressed with the way the situation was handled and with how quickly we responded with the necessary paperwork. The bank was able to take possession of the home while it was still in good condition and started the process of selling it right away.  The client was relieved he no longer had to worry about finding a buyer.

Working Several Jobs to Deal with Debt – Divorced and Raising Severely

Handicapped Son

When Julie first came to HCCI it was immediately obvious that the worry associated with her debt was weighing heavily on her mind.  Julie was dealing with a recent divorce and had a severely handicapped son.  She was working several part-time jobs and had moved in with her parents to get help with her son and be able to save money to pay down payday loans and credit cards she had acquired while married and during the divorce process. 

Julie and the counselor spent two appointments visiting about the options she and her son had at this point.  Julie and the counselor talked not only about her debt but also how to budget for their future; about her long-term goals and the resources she would need to help her son deal with his disability.  In the end she determined that she would like to try a Debt Management Program and the counselor set her up and she began making payments.  The counselor followed up with her a month later and she was comfortable with the payment and had begun using the budgeting skills she learned.

The story doesn’t end there!  About two weeks after HCCI followed up with Julie, HCCI received a call from her mother.  Julie’s parents, Jim and Pam, had spent a great deal of money helping her and her son and were now themselves in trouble with debt.  The counselor talked about their options and they chose to go on the Debt Management Program to stop the calls and get back on track. During the counseling session Pam revealed what a different person Julie had become once her debt was being managed.  Pam stated that Julie had begun smiling and laughing and was interacting better with her son.  She said at one point, “I have my daughter back.” 

Unless people have experienced financial hardship, it is hard to describe how phone calls, letters, and concern overtake every aspect of a person’s life. When HCCI or other agencies assist people with money management, the skills learned and the relief that comes from those sessions touches every part of the daily routine.  In this case, even people around them.

Tenant’s Rental Complex in Foreclosure – Maintenance Issues Not being addressed by Property Management Company

Larry called HCCI’s Tenant and Landlord Department in January of 2008.  He said he had received a notice posted to his door that the rental property in which he was residing was in foreclosure.  Larry then received a letter from a realty management company stating they would be taking over management of the property until the apartment building went through foreclosure and was sold.  He said he and other tenants had been paying their rent on time each month, but maintenance issues were not being addressed.  Additionally, the water was shut off and the new property management would not answer phone calls or return voice messages.  Many tenants are disabled or did not have funds to simply give notice and move. 

HCCI counseled Larry and gave him several options and resources.  One of the options was to notify area media to see if they would do a human interest story on the issue.  Larry called us back the next day to report that he had contacted one of the local news stations.  The news media had interviewed the tenants and the property management company on camera.  The next day the water was turned back on. 

Non-legal Debt Consolidation Company Seemed Reasonable Until Client Found HCCI

Sarah is married, educated, a homeowner and has been employed for last twenty some years at the same company.  Sarah has 12 credit cards.  As her minimum monthly payments and interest rates increased, Sarah struggled with making timely payments.  As a result, she has robbed Peter to pay Paul.  Eventually she signed up with a debt consolidation company that seemed very reasonable and fit the bill for her needs.  Of course she didn’t realize that such companies are not legal in Kansas and, in fact, she could have done herself anything they would do, cheaper and better!  However, she found out from her husband (who had used our services many years ago), about this United Way Agency that helps people with Financial Difficulties, and came to HCCI.  The counseling session at HCCI was one of revelation!! 

At this point Sarah is successfully set up on a Debt Management Program and has become empowered with a wealth of knowledge about personal finance and survival in this day and age of “information overdose” and persistent confusion for consumers.

Delinquent Credit Cards, Medical Bills and Payday Loans

Brenda’s husband had recently passed away when she came to HCCI.  She was left with three kids, two still at home and another living on her own.  She was also caring for her mother.  Brenda’s basement had flooded during the recent heavy rains and she had decided to move due to the condition of home. Brenda also has diabetes and hypertension brought on by stress.

Brenda had delinquent credit cards, medical bills and payday loans.  She was upset and did not know what to do or where to start.  HCCI’s counselor looked over her income and living expenses to see where she stood financially. Brenda had worked very hard to cut as many living expenses as she could.  HCCI gave her several community resources where she could get assistance. She also had the opportunity to work a lot of overtime hours that allowed her to get caught up and pay off some bills.  Together Sarah and the counselor  went over an action plan that she could take to her creditors.  HCCI even called some creditors to see if they would work out a plan with Brenda.  Payday loans were the most challenging but the creditor worked with her to set up a payment plan.  Brenda was able to get a majority of her bills paid off, but her physician urged her to lay off  working the overtime due to the high stress is was causing.  The result was Brenda was unable to pay off her remaining bills.  She came back to HCCI for a revisit and had decided bankruptcy was the solution.  She filed and gained a fresh start.  She is on her way now to rebuilding her credit again.