It’s the little expenses that add up, like buying new clothes, shoes, pots and pans or paying for Uber rides.
For the 13,000 households without a home in the aftermath of the Palisades and Eaton fires of Jan. 7, small, consumer expenses can’t measure up to the cost of rebuilding or ridding homes of ash and smoke. But these are very real costs that act as speed bumps slowing the drive to recovery.
That’s where Westcom Financial, a credit union serving 250,000 people in Southern California, comes in. Through its foundation, the Pasadena-based entity has partnered with ForgiveCo to erase $10 million in consumer debt for fire victims hit hardest.
By the end of the month, some 2,000 individuals will be receiving totally unexpected letters and emails announcing they have been chosen as the first set of beneficiaries of the credit union’s debt forgiveness program, said Wescom.
This first phase will provide about $5 million in debt relief. The program is scheduled to continue for up to 2 to 3 years.
“It is something we can do,” began Darren Williams, president and CEO of Wescom Financial, with branches in Los Angeles and Orange counties. “Maybe it is small in terms of the big picture, but for an individual struggling who is getting collection calls and has this hanging over their heads, this will make it a little lighter and eliminate that burden.”
Altadena and Palisades residents who were told about the consumer debt forgiveness program all thought it will be an effective way to help struggling fire victims remove some debt and stay focused on major recovery issues.
Denise Doyen, whose Pacific Palisades home burned down, said she is managing. But she said perhaps those in the trailer parks in the Palisades could use some financial help with credit card bills.
She said for herself, the upcoming holidays are triggers. “As an example, Christmas is coming up. I had a wonderful collection of wrapping paper, bows and decorations. Now there is nothing left of that. Everything is gone and you have to re-buy everything. It adds up,” she said.
Kara-Lisa Mitchell of Altadena shares the same feelings of loss, of endless lists of things to buy that even 10 months later remain a financial burden.
“It doesn’t dawn on you right away but it happens in little bits at a time. It creeps in,” explained Mitchell, whose father’s home where she was living burned down and the father-and-daughter that lost everything was forced to spend money replacing essential items.
“These are things that you don’t think about,” she continued. “Like now, it is winter and you have to buy a jacket, you have to buy socks.”
Mitchell recognizes the signs. People who have lived in multi-generational homes 30, 40, 50 years in Altadena in particular, are now buying necessities because they’ve lost years of possessions. In the cashier’s line, they resemble young couples just starting out.
Like when she was in a Target store and saw a man purchasing salt and pepper shakers. She asked him if he had lost his house in the Eaton fire and he nodded yes. She credited Wescom for understanding that kind of reality exists for fire survivors, even nearly a year later.
Mitchell has support from her family and friends, but still, she’s had to pay for Uber rides just to go to the market, or to shop for kitchen supplies and clothing for herself and her dad. Plus, there are other surprise debts popping up not related to rebuilding.
On Monday, she received a letter from the IRS saying she owed back taxes. “I just got a huge IRS bill,” she said, saying this year many things slip through the cracks, especially when you’re concentrating on finding a place to live, what to eat and what you need to purchase for surviving.
Courtney Bonifacini, also of Altadena, said she doesn’t need the financial help as much as others. She married her fiancé, Gary Sewell, who both lost their homes in the Eaton Fire. They wed in May at the Pasadena Showcase House of Design, which they also helped design.
Sure, she drove up her credit card bill to around $8,000 a few months ago but has pared it down to about $2,500 now. She wishes she could get more cash to pay for a new house. That’s why she’s exploring modular homes — they cost a lot less per square foot.
“People feel like the help has stopped since there was a lot of help in the beginning,” Bonifacini said on Tuesday. “I think this is great. People still need help. It’s not easy out here.”
Here’s how the debt-relief program will work:
By the end of the month, the beneficiaries in the first phase will get notified they are in the program. Each will get different awards depending on their circumstances, Williams said. That includes a person who has been struggling to pay credit card bills or are late in making payments on a car loan.
ForgiveCo is in the business of helping banks, credit unions and big corporations help customers cancel their consumer debt. These actions, namely erasing billions of dollars of debt for millions of people, become part of the company’s brand. Think Subaru giving money to organizations that helps animals or the environment.
ForgiveCo will acquire the outstanding balance from the lender. Wescom Financial will pay off 100% of that debt. The debt forgiveness is tax free, Williams said.
“Debt is an extremely heavy burden on its own but combining that with the need to recover from a natural disaster can make it all seem insurmountable,” said Craig Antico, CEO at ForgiveCo. “Wescom’s commitment and dedication to relieving some of that pressure will be carried through to not just the people that receive debt relief now, but through future generations that succeed them,” he said in a prepared statement.
For Wescom, the overwhelming impact of the two fires hits close to home. Their headquarters is in Pasadena, across from the Pasadena Convention Center, which served as an emergency shelter in the first few weeks after the Eaton fire. About 50 of their members mostly in Altadena lost their homes in the fire, Williams said.
In January and February, the financial company matched donations it received for fire relief. Wescom raised about $250,000. All of that has been distributed, Williams said. For those who lost their homes, they also deferred mortgage payments and offered interest-free loans, he added.
Now, 10 months later, Williams and others kickstarted this latest relief program. Recipients do not have to be Wescom members, he stressed. In fact, he predicts most who receive the letters will not have heard of Wescom, nor the campaign.
To market the effort, Wescom has partnered with the UCLA Bruins Women’s Basketball Team. Head Coach Cori Close will feature recipients at home games during halftime and also plug the program on the big screen, hoping to draw in donations for future debt-relief buyouts, Williams said.
“The need is still so great that we wanted to do more,” Williams said. “We thought this can really have a big impact. And it will be a pleasant surprise.”