How Bankruptcy Can Help Repair the Damage When Insurance Won’t
If you struggle with your mortgage, or even if you own a home outright, you may not realize bankruptcy and insurance problems go hand-in-hand. But issues come up all the time for homeowners, and sometimes they can lead to serious financial problems.
At our Memphis bankruptcy firm, we’ve seen these sorts of problems break the bank for clients. So here’s what you need to know about these unexpected insurance issues and what you can do to protect yourself.
A Wedding Week Fire
About two weeks before my daughter’s wedding, lightning struck the roof of our house and set it ablaze. In addition to the normal panic any homeowner might feel, we thought for sure it would affect the wedding plans. But it got worse: In combating this fire, a fireman stepped off the wood in the attic and came through the ceiling into one of the bedrooms. The next day, we jumped into action to repair our home.
Insurance was able to replace everything extremely quickly. They put out the fire, patched the roof, and used an ozone machine to clear the smoke. The lightning had affected all of our electronics, so we had to replace every appliance and gadget. Then they reset the windows, fixed the hole coming from the attic, repainted, and more.
Somehow, with the help and support of a lot of people, we got through it in time for the big event. But without a great insurance policy, it truly could have been a disaster. Not only could we have struggled to pay for the obvious damage, but a long delay could have caused:
- a sharp rise in utilities from the hole in the ceiling
- lost income from our computers being damaged
- high personal expenses from having to house the wedding party elsewhere last-minute
- loss of property from not treating the smoke damage well enough
- and so much more.
And that’s assuming insurance didn’t fight the claim and eventually did the needed repair work.
We depend on things to go right when everything goes wrong. And when insurance companies fail us, it can have drastic consequences.
Weather-Related Storm Damage
The same issues arise from other types of storm damage, like:
- Fallen trees
- Electrical fires
- Damaged fences, decks, and other landscaping
- Etc.
Even if your insurance covers these types of issues, the wait can cost additional money that you might not expect.
Weather-related storms in particular can cause serious headaches for homeowners because so many people might be affected. The power supply might go out. Snow, ice, or fallen foliage might block crews from getting to you safely.
You always hope there will be enough contractors and repair crews to take care of an emergency. But in Memphis, that certainly isn’t always the case.
Other Common Liability Insurance Issues
We also depend on homeowners’ insurance for premises liability accidents. These are accidents where someone else gets injured on your property.
Our lawyers see these types of injuries often in our personal injury practice. The causes range from pools and trampolines to slips and falls to animal attacks.
In these cases, the injured person’s insurance company will likely expect your homeowners’ insurance to cover the medical expenses. Those costs can easily skyrocket. And if you don’t have the right insurance, you may have a costly and frustrating legal battle ahead of you.
Home Debt Isn’t Always About the Mortgage
Home ownership can be incredibly empowering, but it can also leave you in a serious financial bind.
We see it at our office every day: Invisible home expenses make it impossible to pay the mortgage and keep the property working correctly.
The mortgage alone doesn’t begin to cover the costs for most homeowners. Not only do you need a great homeowners’ insurance policy, you also need:
- money on hand to cover the monthly utilities
- short and long-term maintenance funds, and
- emergency savings for unexpected damage
These days, far too many of us are living paycheck to paycheck and losing out from inflation. When the worst happens, many people find themselves in a bind.
If that’s you, you’re not alone. And fortunately, you have options.
First, you can appeal to your community. We sometimes call this a “barn raising.” Traditionally, people would gather in rural communities to build a barn for someone, followed by a celebration. In Memphis, that might look like an appeal to your church or friends to help you repair damage, donate appliances, or fundraise.
Second, you can try to work with your creditors and/or debt relief agencies. Sometimes companies will work with you to create payment plans or forgive a portion of the debt. Just keep in mind these usually aren’t legally-binding agreements. So if they decide to go back on their word, you might end up right where you started.
And if those options don’t work for you, or if they simply aren’t enough, you might want to consider bankruptcy.
Bankruptcy and Insurance Problems? Get Legal Help
Our Memphis bankruptcy attorneys have helped thousands of people in Memphis keep their homes and get out of debt for good. We offer a free consultation, where we talk with you about your situation and help you figure out your next steps.
Many people come to us with the goal of avoiding foreclosure. Others need help with debt from utilities, storm damage, and other home expenses. And others want out of debt completely but feel like their homes are keeping them in financial despair, so they want to consider what it might look like to move.
No matter what your goals, you need someone who cares about you and will help you get there.
Our compassionate, experienced team will stay by your side every step of the way.
To get started with a free appointment, no strings attached, just call us at 901-327-2100 or contact us online 24/7.