The ABA Journal put together an-depth piece on families and individuals dealing with foreclosure, bankruptcy, and debt settlement because of the recession. The article starts by telling the story of Paul Vachon and his wife, who were forced both file for bankruptcy and let their house foreclose without any other options.
For 12 years, Paul Vachon lived with his wife and son in a four-bedroom bungalow in one of the nicer suburbs of Detroit. And he had a good job, selling higher-end furniture.
Then, in mid-2007, the U.S. economy collapsed. Detroit was hit particularly hard, as was Vachon’s business. “People in the area, if they are worried about the future of the auto industry,” he says, “are much less likely to spend $700 to $800 for a bedroom set.”
Soon Vachon, 50, had trouble paying his bills. “I was falling behind each month,” he says. “My wife and I were cutting back on our expenses, but I had to keep going into my savings to pay my mortgage. Then my savings ran out.” He says the bank started sending threatening letters after he missed his mortgage payment in February 2008.
Vachon says he couldn’t get the bank to seriously consider a modification of his mortgage loan, and he couldn’t ask any other lenders to refinance his mortgage because the market value of his house had plummeted to less than the value of his home loan.
In the face of their mounting financial burdens, Vachon and his wife, Sheryl, filed for bankruptcy in February. It was a bitter pill.
