Homelessness is a looming fear for many Americans. A 2021 CBS News poll showed that 28% of Americans have worried about it at some point in their lives.
Unfortunately, it’s a reality for hundreds of thousands of individuals and families throughout the country. The U.S. Department of Housing and Urban Development reported that 582,462 people were experiencing homelessness on a single night in January 2022. Countless more live on the precipice, not knowing how they will be able to pay their rents or mortgages.
If you’re facing the real possibility of losing your home due to nonpayment, the most important thing is to take immediate action. Keep reading to learn about things you can do to help avoid becoming homelessness.
Common Reasons for Homelessness
Stephen Eide, author of “Homelessness in America: The History and Tragedy of an Intractable Social Problem,” says the premise that most Americans are just one paycheck away from homelessness is misleading.
“A lot has to go wrong in someone’s life before they wind up on the street living in a tent,” Eide says.
“People become homeless because they lose access to the support network of friends and family that the rest of us would turn to if we faced economic hardship. Living in expensive cities can place unique strains on those networks, causing many people to fall into homelessness,” he adds.
Unemployment, untreated serious mental illness, addiction and domestic violence situations are also common factors.
“After the Marine Corps I started a business that failed and I ended up homeless,” Jeremy Knauff, founder and chief executive officer of Spartan Media, says.
“My business crashed. Then I went to a commission-only job that didn’t work out and that was the straw that broke the camel’s back. I slept in my car. The owner of the company I was working for didn’t know. I had keys to the office so I was first in and last to leave. I cleaned up in the sink, got dressed and got ready for work,” he adds.
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Reach Out for Help Sooner Than later
Whatever brought you to the point where you can’t afford your rent or mortgage payments, Paul Webster, former senior policy advisor for U.S. Department of Housing and Urban Department and consultant to communities dealing with homelessness, stresses the critical nature of early intervention.
“Turn to your safety net. It can be from family members, loved ones, churches or community groups,” Webster says. “Access government assistance. There is more money than ever to prevent homelessness.”
The U.S. Department of the Treasury enacted the Emergency Rental Assistance Program during the COVID-19 pandemic. Each state offers the program and you can visit the National Council of State Housing Agencies to learn what’s available in your area.
In addition, each state has different laws regarding tenant rights protection, so find out what yours are regarding eviction timelines and resolutions. You may have longer to stay in your home than you think. Familiarize yourself with your state’s foreclosure process, too. Most mortgage companies will start the process about three to six months after you miss the first mortgage payment.
HUD recommends contacting your lender within the first month after missing a payment but if you need an advocate, reach out. Nonprofit credit counseling agencies have partnered with HUD to provide foreclosure assistance to struggling homeowners. To find one, use HUD’s housing counseling page or call its interactive voice system at 1-800-569-4287.
Leave your pride behind and accept whatever assistance you can get, Knauff says. “I was going to do everything myself. I didn’t need anyone,” he says. “That was horrible. No. Reach out to people in your network. Get help. Use every resource, tool and program you can. You do not want to be homeless. I regret trying to do everything on my own and wish I had collaborated more.”
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Doing What It Takes Will Take You Far
You might be able to fix the issue before it gets too bad.
“People tend to be very industrious,” Webster says, adding that most who face homelessness “self-resolve” within a few days or weeks. “They get another job, relocate, rent out a room, find different living circumstances or couch surf for a while.”
When there isn’t enough money to pay your landlord or mortgage lender, prioritize and budget like you’ve never done before.
[Read: How to Make a Budget — and Stick to It.]
“The first thing is always shelter,” Knauff says, who has helped others through similar situations. “After that it’s food, then transportation. Consider this triage, like in an emergency room. If you have to, get rid of your car and take a bus, bike or walk. Cut as much as you can out of your budget so you can stay in your home.”
Whether you have a job or not, look into temporary side hustles so you can earn extra money. Sell unnecessary items. Every dollar you can bring in counts.
Try Not to Ignore Any Creditors
As you’re working hard and slashing your budget so you can pay your rent or mortgage or get back on track with the amount you owe, try not to neglect your other creditors.
“Trust me, you will need good credit, especially if you have to find another place to live,” Knauff says. “When you’re in this situation your credit tends to go downhill. Do what you can to protect it. If you can’t make the payments, don’t ignore your creditors. Call the companies and explain what’s happening. They may not be nice, but by communicating with them you can usually work out deals.”
Credit card companies typically offer hardship programs to cardholders experiencing financial crises. Depending on the company, they may temporarily reduce or waive minimum payments, freeze interest rates or forgive late fees.
A HUD-certified nonprofit credit counseling agency can also help you with the budgeting process and provide you with plenty of resources you can take advantage of for free.
Stay Committed and Prepare for the Future
“My advice to people who are going though this is to accept that you will get overwhelmed,” Knauff says. “That’s normal but understand you can overcome pretty much everything. It comes down to your mindset and commitment.”
When you get back on your feet, remember what happened and why you came close to losing your home. Take steps to build emergency savings you can use in case something goes wrong again. Having three to six months’ worth of essential expenses will give you peace of mind and act as protection when you most need it.
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On the Financial Edge: How to Avoid Becoming Homeless originally appeared on usnews.com
