With rising foreclosures and job layoffs around Indiana, the number of vacant houses continues to grow. Boarded-up windows and overgrown lawns create a problem for homeowners nearby, further depressing real estate values. Besides the tragedy of starving pets left behind by the former homeowners and spreading overgrowth of weeds that attract varmints, empty buildings are a magnet for crime. The Indianapolis Star called abandoned houses the “city’s plague”, because often those homes are trespassed by crackheads and prostitutes.
With bankruptcy law offices serving thirty eight different counties in Indiana, I’m particularly interested in how different cities are addressing the problem. South bend, Indiana began a “Vacant and Abandoned House Initiative”, which demolishes abandoned homes. The Greater South Bend-Mishawaka Association of Realtors formed a “training academy” for local realtors to promote “market rate housing” in economically depressed areas of the city.
The Federal Neighborhood Stabilization program is distributing $152 million to Indiana cities to address the problem of abandoned homes as well. According to South Bend city planner Jeff Vitton, it costs about $100,000 to rehabilitate an abandoned home, which means federal aid can provide a partial solution at best.
As a bankruptcy attorney who often deals with foreclosure issues, I strongly advocate that people seek legal advice at the first signs of financial trouble. Aside from the problems of neighborhood blight and crime, “walking away” from a mortgage leaves ‘blight” on homeowners’ lives, damage that can last for years and years. By contrast, filing Chapter 13 bankruptcy may stave off foreclosure. In other situations, it may be best to allow foreclosure and use bankruptcy to gain relief from creditors and the chance for a fresh financial start.
One thing is for sure: the desperation-driven quick way out, compete with the boarded-up windows and doors, the weeds, the starving pets and the crime that result from abandonment of a home – that choice offers positive long-term benefits to no one!