Here in Michigan the most common story is job loss, engineers and white collar folks are getting whacked on a daily basis. It usually starts with the termination, they look for local work at month one, month 2 they look out of state, months 3-6 they find a job out of state. At that point their resources are depleted and can't sell their home the only wise financial choice they can make is file bankruptcy and let their home foreclose, how can a salaried 45-50ish person make up for a loss like that?

I used to think like many people on this forum about people and their debt and its easy to say how stupid and bad they are for walking on their debt, just hope you are never in that situation.

Sure.
It’s easy to see that situation unfold.
It’s also easy to prevent it.
It’s called a Savings Account.

There’s a reason why folks are told by every financial advisor on the planet (and plain common sense) to have at least 6 months worth of income available in a savings account (or the like). By “45-50ish” years of age, most every “engineers and white collar folks” (especially) should have easily been able to accomplish this.

Also - I think Hatt’s post #4 pretty much covers it all.

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1980 300D - Veggie Burner !

As I stated the sitution in the article is stupid and far from typical, either the author is misinformed or was attempting to portray how stupid some people are.

He had his 6 months saved...and then some at the end of six months it was getting dangerously low and certainly not enough to cover the negetive equity in his modest home-25% loss in value plus fee's to sell it. I didn't mention that he also lost his health insurance and he had to pay $1200 a month for coverage.

It's easy to make calls from the arm chair, I'm seeing it from the sideline and its not pretty. Michigan has been in a one state recession for years with very little good news in the forecast.

When I think of how precariously close I was it's frightening. Our company has been around for 116 years now, but that doesn't guarantee a thing except that we've been around for a long time. If the doors closed or had I had to take an extended time off due for health/injury issues I'd have been seriously F-ed.

I think I'm still generally sympathetic because I know how easy it is to get yourself in a financial hole, even when you know it's not smart. OTOH I just have a tough time with people just "throwing in the towel" (overly simplistic I know) or expecting the gubmint to fix their personal situation. Those who get in the rut due to job loss have my sympathy, though.

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1980 300TD-China Blue/Blue MBTex-2nd Owner, 107K (Alt Blau) OBK #15
'06 Chevy Tahoe Z71 (for the wife & 4 kids, current mule) '03 Honda Odyssey (son #1's ride, reluctantly) '99 GMC Suburban (255K+ miles, semi-retired mule) 21' SeaRay Seville (summer escape pod)

Perhaps we have something here for the “Things you don’t see anymore thread.”

Jobs/Careers that last to retirement age. Or people staying with them that long.

Anyone working for the same company for 30+ years like many did in the 40’s and 50’s? A few, sure. But not like folks could/did in the past.

I think the “Gold Watch and a Pension” days are fading fast.

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1980 300D - Veggie Burner !

In September I'll be at my present job 18 years, 20 in the industry. Hatt's right we don't have the whole story and I'll just bet there was a boat load of credit card debt. In any event that couple needs an abacus.

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

If anything there is stupidity on the perps part, to qualify for the FHA they must have conservitive debt ratios and decent credit, they may have piled on debt after they bought the home but they should have done something about the unsecured debt. In most cases they can buy a new home 2-3 years out of bankruptcy and foreclosure but the part they don't know is the owe uncle sam the insured part of the mortgage.....forever if I am not mistaken.

You are an exception.
But then… We always knew you were exceptional.

BTW - Keep us posted on the flying.

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1980 300D - Veggie Burner !

I think part of the cause of the foreclosure problem is TV shows like 'This Old House'. These shows display home renovations that cost tens or hundreds of thousands of dollars to houses which are functional to begin with. People begin to think it's 'normal' to spend this kind of money on the renovation of a functional home. To get the money, people cash in on the equity in their homes, putting them in a dangerous situation should financial problems arise.
Prior to these kinds of shows, I think people would have been far more likely to accept an old but functional home as adequate and not get themselves into debt in order to have a newly renovated home.
It also causes difficulty when trying to sell older but functional homes, like the people in question in this thread. They feel pressure to 'update' the house in order to sell it, putting themselves at risk. Buyers are less likely to be looking for a older functional home and more likely to purchase the newest updated home. Good for Home Depot, Lowes, and the credit card and mortgage industries but not necessarily very good for the individual homeowner. It takes more self-discipline now to accept that older functional home.

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

Yep, thats why my engineer friend who is my age is currantly buying real estate. Its not will you get laid off, its when.

I'd say 6 months emergancy fund plus other streams of income.

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2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Well thats a different type of forclosure. Sudden death an illness are very sad stories to. I know of one where the husband in his 50's died suddenly, and they lost their dream house. In another their kid got sick, and insurance only covered so much. They had to choose between heating oil and eating.

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2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200