Free Creative Ideas to Help Friends Facing Foreclosure or Bankruptcy

by Scott on September 30, 2008

lunchtime hug
photo credit: mrpattersonsir

The 700 Billion bailout plan is not enough to help struggling American’s save homes currently facing foreclosure notices. In some instances a couple may be living paycheck to paycheck and one minor hiccup can derail the family finances. A hospitalization, a reduction in work hours, or increased expenses could mean the difference between shelter and homelessness. Many large institutions that are labeled “too big to fail” have the U.S. government to help when investments go bad, who can you turn to when you hit a rough spot in your family finances?

Your friends are hurting and feeling financial devastated right now. You want to help, but don’t know how. Should you offer to help them in some way as they are having mortgage paying issues? Solving a families money problems with more money may not be the best solution. How can you help friends who are facing a financial nightmare?
Here are free creative ideas to help friends facing foreclosure or bankruptcy:

1. Date night. Offer to watch your friends children while they have a date night. I’m not suggesting you promote going out to Ruth’s Chris steak house and a concert. You can offer to watch their kids at your house and let them have a night to catch-up. No strings attached and you shouldn’t probably assume they will talk about money issues. It’s just a good opportunity to have them talk again.

2. Recommend financial counseling. If your friend was ill or needed surgery, I’m sure you would recommend a good doctor that they could contact. Since a home foreclosure or bankruptcy is a serious financial emergency, see if they would be willing to talk with a professional. Many local cities and counties offer debt counseling services. Also, if you attend a church you can see if your pastor has access to Good Sense Ministry, Crown Financial Ministries and Dave Ramsey church programs. These courses are free at many churches and can offer ideas to help create a budget and track and cut expenses. I have taken the Good Sense Ministry coursework and while much of the information is very easy to understand, you can implement changes overnight. Tracking your expenses daily will open your eyes to where your money is going. The most important aspect of any of these seminars is open communication between spouses and a willingness to try something new with your finances.

3. Listen to your friend. Talk is cheap and free advice is still free. Listening to a friend who is going through a financial disaster like a foreclosure or bankruptcy can be priceless. You might not have the answers, but offering to listen to your friend in need could be the most important thing they need right now. The hard part is going to be listening, as you probably be tempted to give advice.

4. Cook a meal for them. If money is tight for your family as well, you could offer to fix them a spaghetti dinner or have them over to your house for a combined family meal. This will allow you to talk more and show your support through the financial crisis. A healing meal can be a wonderful blessing to your friends.

5. Recommend a professional.
Do you know how to work with your lender and get months added to your mortgage? Do you know what letters to write your lender if you want to extend your foreclosure process? A great, not good, but great realtor or mortgage broker could assist your friend with this information. They have the industry knowledge and could keep your friends in the current home for a few more months. This could also allow them to negotiate the loan terms and keep the home too.

6. Miranda at Yielding Wealth suggested a coupon competition to spark a healthy competition with your friend to try and save as much money as possible. Could you save over $100 a month on your grocery bill? You could also swap coupons or trade coupons with your friends if you don’t purchase a particular item or brand.

7. Buy heating oil in bulk with your neighbors and negotiate a lower price. If you need to purchase heating oil this winter Greener Pastures: Personal Finance suggests helping neighbors save money by buying oil together.

8. Laurel Plum suggests helping friends declutter and sell unwanted items on ebay or craigslist. Laurel has a lot of great info on here website as she specializes in helping people organize and declutter.

9. FruGal emphasizes listening to your friend facing a bankruptcy or foreclosure and also offering to drive kids to school. A carpool to school or even offering to pick up your friends children from soccer practice might give them a little break.

10. FFB recommends calling up a creditor or mortgage company and asking to negotiate the terms of your loan. Can’t hurt when facing a bankruptcy or foreclosure. I would be surprised if they said “no” flat out and wouldn’t be interested in working with the person. If the mortgage lender could add a month or two to the loan, that could help a friend save a home.

11. Jennifer has a wonderful idea to offer and help your friends pets.
Pets can be impacted by a foreclosure and might have to be surrendered to a local animal shelter or adoption agency. If you have the room or yard, you might want to consider offering to house a friends pet.

12. Susan suggests watching a friend for signs of stress and depression.
Offering to talk, listen, and finding medical help if necessary. She also shares how a prepaid phone card could help a friend in need. This could allow someone to stay connected and negotiate with lenders, creditors, and even a realtor.

13. Sean suggests the Drugstore Game found at Chief Family Officer that can help reduce expenses for pennies on the dollar. Great tip!

Do you have a creative free idea that could help your friends through a financial disaster? Leave a comment and I’ll add it to the list above.

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{ 16 comments… read them below or add one }

1 Miranda September 30, 2008 at 3:46 pm

Have a “coupon competition.” See who can match the most coupons for things they actually need with local sales and specials. It is a fun thing you can do together, and it will save you money as well.

2 Scott September 30, 2008 at 5:24 pm

@ Miranda A coupon competition or coupon trade could be a good help stretch a friends food budget. Great idea.

3 Laurel Plum October 1, 2008 at 12:46 am

I specialize in decluttering houses. There are several ways to get a little cash while lightening the load. There is always e-bay, craigs list, and yard sales.

You can find swap sites online where you trade what you have for what you need. There are several good ones out there that can be found by doing a Google search for “swaps”.

You can find less expensive alternatives for hobbies they have to recommend. We are avid book lovers. Going to the library and using Paper Back Swap are much less expensive than going to a book store.

Learning to live in a more simplified home or a more simplified lifestyle can have many long term benefits including financial. But someone already in distress may feel they are being stripped or deprived by these suggestions. Maybe like Miranda said above, it could be something you suggest you do together or bring up as a competition.

4 FruGal October 1, 2008 at 2:04 am

In a case where someone you know is losing their home, the best thing is to be there for them when they come to you, because at that stage suggesting little budget changes probably won’t be much help, however well-intentioned it is. Some people might be offended, or too proud, to accept help that is offered to them, so it might be best to be the listening ear when they need it. I’d suggest doing things like offering to include their kids on your school run, or having them around for dinner, things that aren’t directly money-related, but will help them take their mind off their worries for a few hours.

5 Greener Pastures October 1, 2008 at 4:00 am

We’re all in a panic at work. Nobody knows what to do. No sense taking it out at this point….or is there?! These are great suggestions to help us all keep our cool. I wonder what’ll happen with the bail out proposal this week?

We just need to sit tight.

Lisa

6 FFB October 1, 2008 at 5:46 am

If your facing a bill you know you can’t pay on time then call the creditor and let them know your situation. They may very well allow you some extra time to pay. This can’t be used too often but if used sparingly it can save in late fees, interest rate hikes, and credit score hits.

7 Jennifer October 1, 2008 at 6:50 am

I always hear about people having to abandon their pets because they can’t find a place for them. How about helping a friend find a home or shelter for their pet(s) if necessary…

It would take a big burden off someone to know that someone was looking after their pets so they wouldn’t have to leave them behind.

Thanks for the post!

8 Lee Holcomb October 1, 2008 at 11:22 am

Thanks for the link to Crown Financial Ministries.

I love the coupon competition idea!!

Lee @ Crown

9 carol at A Second Cup October 1, 2008 at 6:03 pm

This is great like. Some suggestions deal with the major concern like #2 and #5 and some offer a balm for a hurting couple like #1
#3 and #4. Anyone depending how close they are can do something on the list for someone they know. Great and sadly a timely post.

10 Susan October 1, 2008 at 11:49 pm

I was there.
My parents declared bankruptcy when I was the last child left at home, and it was both mortifying and isolating.

It’s so overwhelming that it tends to be paralyzing. And the shame can be debilitating.

First- if your friend seems to be suffering from depression, help them. I was a college kid stuck with a clinically depressed mother, a family bankruptcy and bills to pay on my student salary, and completely overwhelmed.
None of my mother’s friends stepped in, and to be honest, the stress ended up nearly killing both of us.
If your friend seems to be in need of more than a cup of coffee and a friendly ear- find the local free clinic and offer to drive them there TODAY! It’s not a matter of “minding your own business” -you could very well save their life.

The telephone is the first thing to go unpaid. And the most vital thing to keep on. Find out their plan and arrange for some prepaid cards to “appear” in the mail if need be. (One of my mentors discreetly turned our phone back on more than once, and I will bless her forever for that.). If they still have a land line, help them switch to the local phone company’s low income plan that costs very very little.

There are local programs to help with heating oil, food, and other needs. Look them up for your friend and just send the information anonymously if you need to. If the lines of communication are open, offer an afternoon during the week to get all the information together for these benefits and help them do it.

Be a safe haven for the kids. Have weekly sleep overs. Hell, have them several times a week if you and your child’s friendship can stand it. Home is tense and scary for the kids right now. Their parents could use the break. In better times my parents supplied that haven to my sisters friends, and those girls are all my adopted sisters to this day.

Shoes and underwear–the two little things that you don’t notice much, but kids wear out/grow out of in a heartbeat. Give the kids odd jobs and buy them shoes at Payless in return. Slip a coupon or gift card under the door if need be. Accidentally “buy the wrong size” and “lose the receipt” for shoes in the next size up from their little one’s current size and ask them to “take them off your hands”.

If your local school district has the blessing of school uniforms, call your local Junior League and ask about a community uniform exchange. They call it “The Rickrackers club” in my community, and it is a community “closet” where children in need can exchange gently used uniforms they’ve outgrown for ones in their new size.

It can’t hurt to help your friend learn about short sales and how they can salvage their credit before it is too shot to even rent an apartment.
It’s a hurtful idea, but better a new start than no chance at all.

Don’t give up. Don’t turn your back. Don’t let them be too proud and isolate themselves. I lost friends forever because they simply couldn’t grasp the concept of the pain and sadness I was going through at that time….but I also learned who my real and deep friend were. And I can honestly say that when I felt like giving up and ending it all-it was that cheery call, sympathetic ear and simple cup of coffee at the local Starbucks that made all the difference.

11 Sean October 2, 2008 at 5:21 am

Even if you can’t salvage the current financial situation and people do not want to talk about these things right away, we all have to keep dealing with finances and providing the basics. I would recommend anyone who is struggling to check out the “Drugstore Game” via the Chief Family Officer blog. When you can take care of low-level expenses for literally pennies on the dollar, that has to help.

12 Scott October 3, 2008 at 2:02 pm

Thank you all for sharing your ideas and suggestions for helping friends deal with the stress of home foreclosures or bankruptcy. I especially enjoyed your personal stories about dealing with a bankruptcy and the importance of keeping constant communication with a loved one or friend.

@ Susan Thank you for sharing your story and for pointing out the importance of listening and communicating with friends through the bankruptcy process. The impact on children has got to be great, especially if they need to move school districts or move away from friends. Helping a friend with a calling card is an excellent idea. Even a pre-paid cell phone would probably help them stay connected. Thank you for for sharing.

@ Laurel Plum Helping a friend de-clutter or organize a home would be a thoughtful way of giving your time and energy to help them out. If they haven’t already, a garage sale or tag sale is a fantastic way to earn some extra income.

@ FruGal I love your name :) I like your emphasis on listening and I think we might be quick to just try and offer a quick fix when we should just listen. I know I need to work on that especially during a crisis. A school carpool is an excellent idea.

@ FFB Calling a creditor or mortgage lender is a great idea and I would hope people would do this before the foreclosure process begins. I would imagine that banks would want to negotiate in this current economic environment. Why would they want to have a short sale or foreclosure to deal with?

@ Jennifer Interesting that you mentioned the pet abandonment issue. I spoke to a couple that had to abandon pets during the foreclosure process as they moved to a townhouse that didn’t allow pets. Offering to take a dog or cat on a short term basis could really relieve stress for a friend. Great tip!

@ Sean Thanks for the tip. I’ll check out the game in her blog.

13 Monroe on a Budget October 6, 2008 at 4:25 pm

Great post.

14 Uncommonadvie October 8, 2008 at 2:27 pm

Why not offer to buy their house from them ad ret it back at cost. You then offer o sell it back to them at a certain price in the future.

They win by geting to remain in their current home. You win should they decide to move on.

15 Austin Real Estate Broker October 14, 2008 at 9:56 pm

Hi Passive Dad et al,
I read over at TheDigeratiLife and followed a link there over here. I love the post. What a great and thoughtful idea to consider how you can help a friend, neighbor, or family member facing a difficult time. We don’t, in my opinion, see enough of this in America today.

Anyway, I have a family member who recently was forced to declare bankruptcy and when we were trying to think of ways to help her, we found Angel Food Ministries. http://www.angelfoodministries.com. I wanted to add it to your resource of ways to help. I haven’t gotten the verdict on it yet, but it looks wonderful.

Hope all is well with you and yours,
Joe

16 Cathy @ Chief Family Officer October 27, 2008 at 5:37 am

What a fabulous list – thanks so much for the link!

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