• 16
  • November
    2011

From an early age most children are taught how to be responsible with their finances. Their parents give them allowance so they can begin to learn how to appreciate the value of a dollar, how to save it, and when to spend it. As they grow older, the value is expanded to include meeting your obligations.

These values become guideposts to our adult lives. It is how we live responsibly in society. We pay our bills. Few of us consider what we might do if these beliefs come into conflict with taking care of our family. It may be difficult to imagine how this divergence could occur.

Yet, for many responsible Tennessee families this is just what has happened to them in the aftermath of the mortgage meltdown. They find themselves in the position of choosing between paying the mortgage and providing for the needs of their families. For the first time in their lives, many people in Nashville faced foreclosure.

How did this happen? When the economy was thriving, many people put their faith in real estate, which appeared at the time to be the best return on investment. Home values skyrocketed and families cashed in on the equity in their homes to pay off bills, take vacations and purchase additional investments to increase their wealth. Everyone seemed to be doing it, and for many, it felt like a safe and reasonable investment.

When the mortgage bubble burst, homeowner's equity evaporated and mortgage companies began to demand ever larger sums for their loans. Families began to feel the pinch and soon found themselves trapped in homes they could neither afford to keep nor afford to sell. This is where the moral dilemma comes in.

Most people confuse their obligation to pay their bills, which is a contract, with a moral obligation. The greatest moral duty for any individual is to take care of the family. A family deprived of a means of support or food on the table is easily devastated, both emotionally and physically. A bank, on the other hand, is hurt fiscally, but stands a far greater chance of recovery.

For some individuals, meeting their family obligations won't always mean losing their homes. There are other options. For example, a Tennessee attorney may be able to help families with stripping off second mortgages on their homes by using Chapter 13 bankruptcy to eliminate unsecured debt.

Every situation is different and that is why there are different types of bankruptcy available to help families get a fresh start.

Source: www.msnbc.msn.com, "How a Financial Professional Lost His House" 9 November 2011, Carl Richards