Thursday, April 02, 2009

US Economic Crisis Update: Hidden Homeless Emerge As Economy Worsens

Hidden homeless emerge as US economy worsens

By Steve Gorman and Suzanne Hurt

Mar. 26- Emergency shelters brimming with homeless people in California's capital are quietly turning away more than 200 women and children a night in a sign of the deteriorating U.S. economy.

The displaced individuals on waiting lists at St. John's Shelter and other facilities often turn instead to relatives or friends for temporary living quarters, perhaps moving into a spare room, garage or trailer. The less fortunate might sleep in their cars or a vacant storage unit.

They are the hidden homeless. And their ranks appear to be growing as rising joblessness and mortgage foreclosures take their toll in Sacramento and other U.S. cities, experts say.

U.S. President Barack Obama recognized the trend in his televised news conference this week, saying, "the homeless problem was bad even when the economy was good," and he vowed to bring greater government resources to bear to deal with it.

"It is not acceptable for children and families to be without a roof over their heads in a country as wealthy as ours," he said.

A "tent city" of up to 200 homeless in Sacramento was thrust into the media spotlight last month as a symbol of the battered U.S. economy. California authorities said this week they would shut down the illegal settlement and find other shelter for its residents, most of them chronically homeless.

Homeless advocates say they expect such encampments, which already exist around the country, to spread as the housing crisis worsens and shelters fill up.

"I think there's a slight trickle of people who've been at risk of homelessness who are winding up in tent cities or knocking on shelter doors," said Michael Stoops, director of the National Coalition for the Homeless in Washington. "I expect a tremendous increase in homelessness over the next couple of years."

Stoops, who has worked with the homeless for 35 years, said the newly dispossessed often retain some income and seek initially to downsize or find cheaper accommodations.


"Their worst nightmare would be winding up on the streets, in a tent city or a shelter," he said. "That's the last stage. They will do everything they can before that happens to them."

Maria Romero, 52, who held a series of low-paying jobs over the years before steady work became hard to find, said she lived out of her automobile for a year before reluctantly moving to St. John's Shelter in January.

"I'd rather be by myself. My car was my own space," she said, adding she would never consider living in a tent city.

"It wouldn't be safe, especially for a single female," said Romero, a high school dropout forced by circumstance to live in a car or shelter more than once in her life.

Her experience illustrates the complexity of homelessness in America, where the most economically vulnerable are often the first to fall through the cracks during hard times.

The latest national figures, in a January report by the National Alliance to End Homelessness, actually showed a 10 percent decline in the homeless population two years ago -- from about 744,000 per night in January 2005 to nearly 672,000 per night in January 2007.

But 36 of the 50 states reported increases and homeless advocates worry that the national trend will be reversed because of the deepening recession and housing crisis.

As of 2007, the report said, 42 percent of homeless people in the United States, and 70 percent of those in California, slept on the streets, in cars, tents or abandoned buildings.

The "Skid Row" area of Los Angeles is thought to have the nation's highest concentration of homeless, with more than 5,000 counted in that 50-block area in 2007.

Experts say it typically takes six to eight months to go from losing one's home to turning up at a shelter doorstep. Some already have noticed more than a trickle.


"I've never seen it like this before, and I have 30 years of experience working with the homeless," said Darlene Newsom, head of the UMOM Day Centers emergency housing project in Phoenix, Arizona, where the number of homeless families seeking services has doubled in the past three months.

Loaves & Fishes, a Sacramento charity that supports the homeless, now provides a free lunch to about 650 people a day, up about 10 percent from a year ago, but private donations to the organization have been flat.

"We are struggling to keep our doors open," director Joan Burke said.

Nearby St. John's Shelter, which caters to women and children, has been running at or near capacity for months -- filling roughly 100 beds a night -- with a waiting list well over twice that long, case manager Kellie Dockendorf said.

This is up from the daily average of 80 women and children turned away in 2008. And getting in can take up to 45 days.

The mix of clientele is changing too, she said.

"We're getting a lot more working people. We're getting more people with education. We're getting a lot more people who are working part-time or not getting enough hours to pay their bills," she said.

Keysia Bell, 38, had made a living as a caregiver for the elderly until full-time work became harder to find.

After a period of paying to stay with friends or relatives for weeks or months at a time, then renting a house she could no longer afford, she ended up at St. John's two months ago with her 17-year-old and 10-month-old daughters.

"I'm out of a job. I'm out of a place to stay. I have a baby daughter, and it all just became overwhelming," she said.

Source: Reuters

Recession forcing more senior citizens into bankruptcy

By Ana Veciana-Suarez

Mar. 28- Jose Abrahantes has been working for about half a century -- in construction, landscaping, even as a janitor cleaning offices on the night shift. He figured he would eventually enjoy a relaxing retirement.

But at 66, with medical bills piling up after an emergency surgery, Abrahantes has filed for bankruptcy. Retirement isn't even in the picture. Instead, he's working part-time at a Publix bakery.

''I had no choice,'' said Abrahantes, who rents a modest Little Havana apartment with his wife, Carmen. ``If I'm making $8 an hour and trying to live off that, there's no way I'm going to pay down all my bills.''

Abrahantes is one of a growing number of senior citizens doing what they once thought unthinkable -- or, as Abrahantes put it, ''embarrassing and painful.'' Hit hard by the slumping economy, unable to pay mounting bills from meager retirement savings, older Americans are filing for protection from their creditors in record numbers. Experts said many end up bankrupt because of medical bills they can't afford to pay. Others simply can't cover their living expenses with their Social Security and savings.

In 2007, Americans 55 and older accounted for 23 percent of the more than one million Americans who filed for bankruptcy, a threefold increase from 1991, according to a recent AARP study. They experienced the sharpest increase in bankruptcy filings of all age groups, jumping from 8.2 percent of all debtors. The numbers are especially stark for older seniors, with bankruptcy more than quadrupling for seniors ages 75 to 84.

Elizabeth Warren, a professor at Harvard Law School and the AARP study's author, said these bankruptcy filings provide a snapshot of the financial vulnerability of older Americans who "now, more than ever, are confronting serious financial challenges.''

What's more, advocates said seniors have been filing at even higher rates since 2007, the last year of the AARP study, because of a declining economy, increasing healthcare costs and a lack of retirement savings.

''It's bad,'' said Barbara Prager, executive director of Coast to Coast Legal Aid of South Florida, which serves people 60 and older in Broward. ``We're seeing a lot of seniors with medical debt and without the income to pay for it. And it's coming at a time when it's harder to find solutions.''

Carlos Franco, the community outreach director for the nonprofit Consumer Credit Counseling, said the problem may be compounded in South Florida, where many senior citizens can't understand English or don't have the savvy to negotiate debt relief.

''They let the bills pile up. They bounce checks,'' he said. ``They don't understand what's going on or what the bills and letters are saying.''

His counselors don't automatically suggest bankruptcy. Instead, they draw up a budget and look at a family's income versus its expenditures. If possible, they ask creditors to reduce interest rates and propose a repayment plan. However, he adds, seniors who depend on small Social Security checks and savings hit hard by the stock market find their options limited.

In the past, some tapped the equity in their homes. But with the housing market in the doldrums, that may not be an option. A September 2008 AARP study found that 684,000 Americans 50 or older -- 28 percent of all homeowners -- were delinquent on their first mortgages, were in foreclosure or had already lost their homes.

''Because the equity value of homes has dropped so much, we can't use reverse mortgages as often as we used to,'' Prager said. ``We're literally flooded with clients in foreclosure or about to go into foreclosure.''

At Consumer Credit Counseling, a senior citizen filing for bankruptcy is offered a bankruptcy education class and told to visit an attorney for legal advice. Emotional support is often required, too. ''It's very hard for them at this point in their lives to deal with having to declare bankruptcy,'' Franco said. ``It can be very embarrassing. Many Latinos don't even want to talk about it.''

Timothy Kingcade, a bankruptcy lawyer with Kingcade & Garcia, said his clients often break down and weep in his office. ``It's very traumatic for them. It's not what they expected in their golden years.''

Their unpaid debt, he adds, usually starts off as a small figure. After several months, however, it can add up to tens of thousands of dollars.

''What I see a lot of are seniors using their credit cards for prescription drugs,'' he said. ``They need their medicine so they worry about paying it later. But even if you're only charging $200, $300, $400 a month, it adds up. It's not long before they're in a lot of trouble.''

Abrahantes' problems started when he was in an accident and was unable to pay the $1,000 deductible on his damaged pickup truck. When he could no longer afford the payments, the bank repossessed the truck. Then Abrahantes developed an infected boil that had to be removed. The bill: $40,000. Abrahantes did not have health insurance or Medicare.

Calls and letters from creditors became too much for Abrahantes, so he filed for bankruptcy.

''If I were 30, it would be different,'' he said. ``I could get myself out of this hole.''

Medical-related financial debt can be particularly problematic for seniors who are uninsured but not old enough -- or poor enough -- to receive government help, said Dave Certner, AARP's legislative policy director. He singles out the ''pre-Medicare'' age group -- 55 to retirement -- who may be an injury or illness away from financial ruin. ''If they don't have insurance through an employer, they find it hard to get affordable insurance on their own or [a policy] that doesn't disqualify them for all these pre-existing conditions,'' Certner said.

More pre-retirement workers are faced with this problem as cost-cutting employers drop insurance or lay off older workers, he adds.

But not all senior citizen bankruptcy is due to healthcare costs. Patrick Cordero, another bankruptcy attorney in Miami, said about 60 percent of the elderly clients he sees are simply in over their heads: Income doesn't cover living expenses.

''One month they pay the electric bill but not the phone,'' he said, ``The next month they pay the phone, but not the electric bill. That goes on until they can't juggle it anymore.''

The reason? Lack of planning for retirement. In other words, some people are outliving their savings.

''Now, more than ever, you have to be prepared for retirement because that's the one thing nobody is going to finance for you,'' Kingcade said. ``When planning, you have to build in the possibility of an expensive long-term illness. You better have a good game plan.''

Source: Miami Herald

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