(2 of 4)
Stay Well, or Lose It All
What's an American dream story without a lucky break? Joseph Zachery's took the form of a mysterious stranger who pulled to the side of the road one day in 1986. An older white guy, slowing his car to ask a strapping black teenager why he was running down the street. Zachery, who was 19 at the time, could think of no benign reason why this man might be interested in him, but instead of ignoring the driver and running on, he gasped out an answer. His car wouldn't start, and he was due downtown to take a test for a job with the fire department. If he was late, he'd be locked out, and 50 blocks was a long way to run, so he was almost certainly going to be late but he had to try.
Climb in, said the man. Zachery swallowed his misgivings, and away they went. They arrived at the test site with moments to spare. As Zachery bolted from the car, the man called out, with eerie conviction, "The job is yours." How did he know?
Zachery still wonders, as he reflects on the upward path his life followed from that chance encounter. His was the textbook tale: a foot in the door, some hard work and enterprise, and another American gets ahead. Twenty-two years after his lucky break, Zachery was a veteran firefighter earning north of $60,000. Like most firefighters, he always had a second job delivering pizzas, driving a street sweeper, installing meters for the power company. Eventually he started his own business, demolishing houses condemned by the city. He supported an aging mother, a son in college, a new wife and a stately old house on a large lot with big trees in the center of Kansas City. The home cost him about $100,000. It needed renovation, which Zachery planned to do himself, one room at a time. As home values rose, he used his equity to buy the heavy machinery required for his business. He was pursuing the ideal of the self-made entrepreneur, but his ambition left him dangerously exposed when the housing market soured, because he owed nearly twice the original purchase price.
Then chance paid another visit.
It was July 13, 2007, Zachery's 41st birthday. He was working in the hazardous-materials unit, and a call came in from a local hospital: chemical spill. Normally, Zachery would have been behind the wheel of the truck, but on that day, he was acting captain, so he rode in the passenger seat. Siren blaring, lights flashing, horn honking none of it registered with the driver of a city trash truck, who turned into the path of the speeding haz-mat unit. The crash folded the front of Zachery's vehicle, and his head spiderwebbed the windshield.
The aftermath played out in slow motion and is playing out still. Zachery suffers from pain in his back and neck. There are unexplained memory lapses, lost initiative, mood swings and depression symptoms that eventually led doctors to a diagnosis of postconcussion syndrome. In time, the fire department placed Zachery on full disability, but not before a doctor assigned to his case by the city prescribed a course of electroshock treatments that left him unable to remember his own neighborhood.
His finances began to fall apart. As he shuttled from one doctor to the next, his demolition business went into the tank. He was in no condition to rip old houses apart, and even if he had been, the soft economy was suffocating. Having pledged his home equity as collateral, now he was forced to sell his demolition equipment at a loss. He fell behind on his mortgage payments of $1,647 per month. His son had to leave college in Virginia to attend a school near home. His mother passed away.
Zachery showed up for a recent interview at one of Kansas City's barbecue temples carrying a large box full of medical records. But no amount of documentation could resolve his bewilderment over what was happening to him. "You play by the rules, then when you need them, the rules change," he said. "I had an occupation. I was at the top of the food chain, keeping my head above water. Then I happened to show up for work on my birthday and everything since then has just spiraled."
The math looks like this, he said: his pension pays him a little more than $50,000 before taxes, out of which he pays about $800 a month for medical insurance. That leaves some $2,400 a month, he said, for his mortgage and other expenses. He has about $15,000 in unpaid medical bills and a similar amount in missed house payments. He has no significant assets; his home equity is gone. Houses comparable to his in more desirable neighborhoods are selling for less than the amount he owes to the Bank of New York Mellon. As the saying goes, Zachery is under water. It was this math that led him to Wagoner's bankruptcy office. (See pictures of the top 10 scared traders.)
For constant business updates, go to 24/7wallst.com.