A Story About Bankruptcy in Dayton, Ohio

I see people every day. People with pride, work-ethic, and humility. Unfortunately, many of these people have fallen on hard times. They are distressed and worried about providing for their families. I met John and his wife Sandy early in 2011. They developed careers working for the GM plant, Delphi, in Moraine, just south of Dayton. John had been there 26 years; Sandy had been there for 23. In fact, that is where they met and began their relationship. When I met them, they had 3 children, the oldest of whom was about to graduate from high school.

John and Sandy took the responsible steps that make a strong financial situation for their family’s future. They made extra mortgage payments and owned their home free and clear in 2005. They made extra contributions to their employer-provided 401(k) accounts. They did not finance things and had never used a credit card.

Then, economic crisis struck Dayton and the automotive industry at large in 2007 and 2008. John and Sandy lost their jobs. Even though John had put in enough time at Delphi to garner his full pension, Delphi did not have the money to honor his years of work. They lost their health insurance. John was able to find a job making one-third of his previous salary; Sandy was unable to find work. Eventually her unemployment benefits ran out. They survived by liquidating the dwindling 401(k) accounts, using credit cards, cash advances, food stamps, and taking a mortgage out on their home. After some time, they were unable to keep up with the mortgage payments, the bank initiated a foreclosure, and creditors were trying to garnish 25% of John’s paycheck.

That’s when I met John and Sandy. Proud, hard-working Ohioans that had been financially responsible most of their lives. We talked for some time about what their goals were. They really just wanted to be able to keep their family warm and fed. Sandy had finally just landed a job making minimum wage. So, we engaged in some credit counseling and negotiations with some of the creditors that were attempting to garnish John’s pay. When the creditors wouldn’t budge, we resorted to exercising their federal bankruptcy rights. We were able to eliminate the home debt and get them into a suitable rental. We protected John’s paycheck from the lawsuits. We even eliminated the tax debt that they had incurred when they liquidated the retirement accounts. We gave them just enough breathing room to be able to manage their new budget.

Since that time, their story has improved. John found a position as a shift manager at a machine shop, and Sandy has decided to stay at home and help raise their grandchildren. They are trying to reestablish their retirement, but they still don’t finance anything or use credit cards. They understand that their bad situation wasn’t a result of any bad decisions. It was just a function of these hard times. At their worst, they were still among the friendliest and most genuine people I’ve ever met.

Sometimes the line between feast and famine is thinner than we’re led to believe.