What would your finances look like in the wake of a serious natural disaster? That is the question that scores of Washington residents are now facing, after they suffered major property losses because of the Snohomish County mudslide. Although one community bank is offering debt relief by canceling uninsured debts, larger financial institutions are not being so generous. The Coastal Community Bank has pledged to help patrons whose insurance will not help with their property loss woes. Questions still abound for others who did not use Coastal as their lending institution.
Damage assessments show that the majority of the homes destroyed in the slide served as primary residences for the occupants. None of those primary residences was enrolled in landslide insurance programs. To make matters worse, most of those homes belonged to low-income residents who are poorly prepared to pay off their debts. The average value of the homes destroyed in the slide is estimated at about $164,000.
Although the state may step in to provide financial relief for those with property loss, many may face financial challenges in the wake of this disaster. Although all may seem lost, experts in the field say that the best thing clients can do is to simply call their bank to find out what they can do about the situation. Having a bankruptcy attorney at your side throughout this process can also be helpful.
In many cases, slide victims may have to resort to filing for bankruptcy to receive true debt relief. Industry leaders say, though, that this is a lose-lose situation for both the bank and the investors. Instead, they are urging financial leaders to find a better solution to help slide victims hopefully reclaim their land and their financial well-being.
Source: The Seattle Times, “Slide erased their homes, but maybe not their loans” Sanjay Bhatt, Apr. 01, 2014