The Mortgage Crisis, Man’s Best Friend and Making Bankruptcy Work for Both

We talk a lot about the real estate reckoning and its effects on companies, individuals, municipalities, and sometimes states. But these days the mortgage crisis is even handing the family pet a raw deal, as families are forced into foreclosure and out of their homes, and the animals they owned are left behind in animal shelters, or worse yet, in the empty houses to languish alone.

A recent USA Today article reported that some of these same pet owners, befuddled by their beleaguered budgets, astonishingly enough will leave their pets behind with small amounts of food and water. In the best of cases, these animals are found days later, starving and near death. In the worst of cases…well, you get the picture.

Before making a drastic decision to leave your hopelessly underwater home, and, in the same step, possibly abandoning a beloved pet, please consider how bankruptcy can alleviate your tough financial situation and that of even the furriest members of your family.

Despite the fact that downsizing your living situation during uncertain financial times can be a good idea—freeing up savings for potential money misfortunes down the road—you need not be completely stranded by a struggling economy and, in the process, leave your pets stranded too. Lender indifference, mortgage delinquency and underwater living are pecuniary problems tailor-made for a bankruptcy solution.  If you can put your face to the millions of faceless statistics: having trouble making your mortgage, living in a home that will never have equity, residing in an area that is currently devalued and facing foreclosure for the foreseeable future, or “doubling up” to avoid homelessness, bankruptcy can help get you back on the right side of the financial tracks. A Chapter 7 bankruptcy will allow you to get our from under an underwater home, eliminate your personal financial liability, and/or otherwise allow move forward financially. Or, if you so choose, keep your home while using Chapter 13 to catch on your arrearages, strip away an unsecured second or third mortgage and buy yourself much-needed time to qualify under a home loan modification program.

And contrary to what you might have heard, a bankruptcy filing does not oblige you to give up “Fido” in the process. Currently bankruptcy courts see pets as more than property, in some cases even allowing debtors to claim reasonable pet care expenses in their bankruptcy plan. Here, the emphasis is on reasonableness, with $50 for monthly pet expenses for a couple of dogs likely being found more reasonable than $1000. In this determination, family pets can move beyond being what one judge called “a helpless casualty of a family’s financial crisis.”

And don’t worry if ‘Fluffy” is actually an iguana. Family pets, (AKA “companion animals”) are not simply defined as dogs or cats. In the case of In re Gallegos, a U.S. Bankruptcy Court in Idaho held that a pet horse, despite its outdoor living situation, qualified as a “household pet.” The judge found that “[i]t is more the fact that an animal is held primarily for the enjoyment and companionship of its owners, and not for some other reason, that makes the pet a member of a debtor's household.”

In sum, bankruptcy can work for debtors in need while also providing the care and maintenance for companion animals that they deserve. It could work for you too. If you’ve been affected by the economy and are wondering how to care for all of the loved ones in your household, knowing a qualified bankruptcy attorney can help you face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a secure future beyond the burdens of the mortgage crisis. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-833-627-0115, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.