Law firm sees new layer of poverty

Even in good economic times, Blue Ridge Legal Services in Harrisonburg has more than enough work to keep it busy.

But the nonprofit law firm, which serves areas from southern Shenandoah County to Augusta County – including Waynesboro and Staunton – is hard-pressed to keep up with the demand for its services.

Recent layoffs, including the 342 people losing their jobs at Invista, as well as the recession, have pushed people to the brink, according to John Whitfield, executive director of Blue Ridge Legal Services. With a sharp increase in cases involving bankruptcy, foreclosure, evictions and wage garnishment, Blue Ridge is having to perform “triage” and take just the more serious cases.

“There’s a whole new group of people living in poverty and have no income,” Whitfield said. “And they’re not used to living in poverty, so it’s a new experience for them.”

Whitfield said that beyond unemployment and food stamps, “there’s not much of a safety net out there for people,” though sometimes, charities step in. In Virginia, the unemployed are eligible for up to 26 weeks of benefits. The Virginia Employment Commission also provides job placement and training services, as well as workforce information.

“It’s interesting to see them looking for that same kind of safety net that others have been looking for,” Whitfield said.

With more than 3,500 people who could be laid off in the next two months, according to WARN Act data, the VEC has added Saturday hours at its customer contact center to handle the increased volume.

Whitfield, though, warns of increases in contested unemployment cases due to higher employment taxes paid by employers to the VEC.

Financial struggles, too, mean more people are turning to predatory lenders, which he compared to pouring gasoline on a fire.

Foreclosures, he said, have reached “epidemic” levels in Northern Virginia, while starting to reach those levels in the northern Shenandoah Valley, He said that trend hasn’t reached Augusta County yet.

Suzie Cook, vice president of marketing for DuPont Community Credit Union in Waynesboro, advises people not to wait if they fear losing their house.

“The worst thing to do is to wait until the foreclosure notice shows up and ask the financial institution, ‘how can you help me,’ because by that point it’s pretty much too late,” Cook said.

While people are calling the credit union to learn what their options are, Blue Ridge has seen a 20 percent increase in the number of people it has served in the current quarter, but it has also had to turn away three times as many people. Whitfield said the agency cannot work miracles.

“We can’t do more than what we can do,” Whitfield said.

Financial institutions like the DuPont Credit Union are trying to help customers facing difficulties, Cook said. 

“As a credit union, we’ve been doing this type of thing for the past 50 years,” Cook said.

DCCU, she said, advocates being financially proactive, telling people they need to know where their money is going.

“If you don’t know where your money goes, how do you decide what expenses to eliminate as you need to cut your expenses because you’ve been laid off,” Cook said.

Cook said people who have been laid off or fear that predicament should call their financial institution – whether it’s the credit union, the credit card company or their financial institution to work with them.

“Whether it’s themselves, or their spouse or another family member who’s getting ready to be in this situation, this is the time to prepare,” Cook said.

She said there could be options to skip a payment, combine loans or qualify for refinancing in order to lower payments. It’s important, Cook said, to try and maintain credit worthiness even with an impending layoff.

“In this day and age, your credit impacts your job, housing and lending,” Cook said.

She also said parents should talk to their kids about the family finances and get them involved, on their level.

Whitfield says for people already in trouble making payments, they need to prioritize in this order: rent or mortgage, electricity, food and car payment. Then, and only then, he said should people pay off any other debts.

“Don’t let a debt collector who’s hounding you make you pay them before you pay those things,” Whitfield said. “They’re always going to get you to try to pay those things, and that’s a mistake.”

He said people keep all paperwork and avoid high interest loans. He advises people to open their mail and read it to be fully aware of their situation.

“Call us sooner rather than later,” Whitfield said. “We can do them a lot more good if we have time.”

Cook said handling a layoff comes down to basic financial planning.

“There’s really no silver bullet for a fix for everyone’s finances because everyone’s finances are as unique as they are,” Cook said.