As a bankruptcy attorney, I see people in all stages of financial crisis. From the initial stage of fear and disbelief, to resignation and regret, and finally to acceptance and hope for the future. It’s an all too common trajectory in our society today, but I want to share with you the three most important truths about home ownership I’ve come to discover in helping hundreds of people sort out their lives and move beyond the wreckage of a financial disaster.
1. There’s more to life than owning a house.
Living in the United States, we are bombarded from all sides about the importance of owning a home. Sure, there are significant tax benefits. Of course, it’s nice to have a fixed address and a sense of ownership and pride. You decorate to your tastes, you show off your remodel project to the neighbors. With owning a home, you can have a nest egg for retirement, or something to pass on to your children, a promise of a better financial start than perhaps you may have begun with.
Perhaps. But remember, that’s not all that comes with owning a home. Repairs are costly. Property taxes are costly. And unless you’ve paid off your mortgage, who really owns your home anyway? The bank. The mortgage you owe is most commonly the single biggest bill you have, every month of every year until it’s paid in full and more.
And if you have trouble paying this mortgage? Your bill -the cost of living in this “dream home”- becomes even greater. The worry and frustration begin to take a toll on your health. Your marriage. Your family. The joys of home ownership are replaced with the nightmare of being saddled with something you can no longer afford yet feel honor bound to keep. So many of my clients believe that letting go of this unwieldy load, this monthly and painful reminder of their own financial limitations, will somehow result in greater sorrow than it is creating already. Nothing could be further from the truth.
From my perspective, walking my clients through the process of letting go and moving on, people suffer most terribly when they realize their dreams of what owning a home should be are not the reality of what it has become for themselves. And what I so often tell them is that it’s not worth it. In the end, your home is in your relationships with your family, your friends, and your loved ones. Your home is in your health, in your hopes and dreams for the future. Your house is just a temporary place where you put all those things. A house is not who you are. A house is not what you do. A house is only a building you live in, for a period of time, as long as it makes financial sense for you. When it ceases to make financial sense, it is time to move on to a different place. To let property ownership damage all the really important things in life-your health, your relationships, your sense of well being and dreams for tomorrow-is a mistake, which brings me to the second truth I’ve learned as a bankruptcy attorney.
2. You can start again. You can make new goals.
Notice I say “goals” not “dreams.” A dream is something you want for your heart, like falling in love, having children, finding a worthwhile livelihood. Our dreams are who we are as people, driving us to grow, explore, and discover new ways of being in our quest for happiness. Our dreams add beautiful color to our emotional lives, and define who we are as human beings.
Goals are not dreams. Goals are about material things. A goal can be “I want a house” or ” I want a job that pays me more” or “I want to own a new car.” Goals require only basic algebra. You set the value you need to get what you want; you deduct your liabilities, and you have found the number you need to reach your goal.
Home ownership is about setting a financial goal. When you reach the number you need, you buy the home. Despite what your realtor and any television commercial will tell you, home ownership has nothing to do with happiness, your health, the quality of your family relationships, or whether or not you find a worthwhile livelihood. Home ownership merely signifies you did the math. The assets minus the liabilities equaled a number that allow you to live in a certain way, in a certain location. That is all.
The great thing about financial disaster is that in solving it, you get to come up with new goals. New plans. New ways to reach the necessary “numbers” you need to buy the possessions you want. It’s a fresh slate. A new chapter. And in doing so, maybe you too will learn the other lesson so many of my clients and I have taken away from the bankruptcy process.
3. Material assets do not determine success and failure in life.
We’ve all heard the phrase “you can’t take it with you.” But do you understand what that really means? Yes, bankruptcy is extremely stressful. The prospect of losing an asset like your house is never easy. But in the end, it is your health, your family, and the quality of your relationships that determine whether you are a success in life or not. All you have to do is turn on the television or look at a supermarket tabloid story of another wealthy celebrity “crash and burn” to see that the accumulation of money is not a true measure of success or failure. Sure, it’s nice to buy things. Our country is based on the ideals of capitalism, and the promise that our purchasing power will allow us more control over our lives and our happiness. But in the end, is that really true?
If you answered no, then you already know in your heart that losing your house, while painful, is not the end of your life or your future. It is not the end of happiness. It is the end of a financial chapter. It is the end of a series of difficult decisions, of sad and unexpected events, of twists and turns in a life that will have many more to come. There is a future for you after losing this particular home and quite possibly a very happy and successful one. Focus on what really matters. Forget the lie that you are determined by past mistakes or that your account balances somehow determine your personal value. Seek help through the bankruptcy laws available to you.
Frequently, I see in my clients a sense of relief after it is all said and done. Losing your house can be the beginning of something new, something different, something better than what came before. After a long winter of financial problems, moving forward can only bring the spring.