There’s a very good Bloomberg story featuring Rebecca Black, a Memphis resident who bought a three-bedroom house on Hazelwood Road in southwest Memphis in May 2005.


When she moved in, Hazelwood Street was in a quiet community in which children played in the street and neighbors tended to their yards. She felt it was a good move for her two teenage sons. She thought she could afford the $57,000 mortgage as long as she skipped oil changes for the car and served her boys store-brand groceries.

However, her next-door neighbor soon died and his family lost the house. There were also two foreclosures across the street. Around that time, an abandoned house down the street had gang graffiti spray-painted on the side and one of Black’s sons had a gun pulled on him.

Times were getting tough and the neighborhood was going down.

Black, like many other borrowers, was enticed into getting a 2-28 mortgage. She had two years of a low, fixed interest rate that seemed affordable, followed by 28 years of rising payments. She reached her limit in 2010 and it was her turn to go.

“I was crazy about that house, and so proud of it,” said Black. “I just didn’t have the money.”

It’s in our nature to desire the nicer things in life. However, when making financial decisions, we have to look at the bigger picture. Will buying this house put you in a strangle hold financially, either now or in the future?

When making those financial decisions, we also can’t neglect our other expenses, such as not getting our oil changed, because that’s a problem that can come back to bite. If you don’t take care of your car as necessary, it will eventually have more expensive problems that will put even more of a financial strangle hold on your life. The car may also breakdown resulting in an inability to get to work.

To make matters worse for Black, after she received the notice that her home was being foreclosed and consequently packed up and left, one of her old neighbors complained about a snake in the kitchen. So, Memphis city workers came and mowed Black’s grass and also nailed plywood over her windows and doors to keep vandals out. For that work, Black received a bill for $520.

She also received a tax bill a year after she left. EMC Mortgage, her lender, never claimed ownership of the house so it was technically still hers.

A mess is an understatement to describe this unfortunate situation.

There is a way to avoid a mess like this, however. If you’re behind on your mortgage payments, I urge you to consider filing for bankruptcy.

A Chapter 13 bankruptcy can stop the foreclosure and allow you to pay back debt over a period of years instead of all at once.

If a Chapter 7 bankruptcy is used to clear mortgage debt, it will not allow you to keep the house, but instead a Chapter 7 will allow you to keep the house by clearing out other debt to make way for mortgage payments.

Both of these are options that will help you keep the home you love and also clean your finances so you can work to improve your financial status.

At Darrell Castle & Associates, we have access to a 14-week program that will help you improve your financial status by teaching you:

  • how to rebuild your credit the right way
  • why most credit scores are wrong
  • which credit cards actually hurt your credit score
  • how to stop lenders that report the wrong information
  • how to re-establish your credit after a bankruptcy, foreclosure or short sale

This program is offered to our clients for free.

If you have any questions or if you’re considering bankruptcy, please call us today at (901) 327-2100 or fill out the “Get in Touch” form below. One of our attorneys will be happy to discuss your situation with you, free of charge.