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The purpose of this paper is to examine the mental state and the disposition of those who have fallen on hard times during the recent financial crisis and have had their homes foreclosed on or their automobiles repossessed. It also proposes an alternative process for dispossessing individuals that preserves the mental health of such individuals and the banks’ reputation.

This study uses the hermeneutics approach to analyze the predicament of those whose homes have been foreclosed on or whose properties have been repossessed by financial institutions to better understand their predicament.

Those whose homes have been foreclosed on or whose properties have been repossessed by financial institutions are traumatized. They feel victimized, bitter, helpless and hopeless and have poor mental state. The study draws on theories in counseling psychology to propose an alternative approach to making loans that take long time to be repaid (long-term loans), and for repossessing personal properties such as automobiles and for foreclosing on real property (homes).

As a qualitative study based on a small sample, the findings of the study are limited to only those who have been studied. A further study that leads to a generalized result will be useful.

The study develops a practical framework that could be useful to financial institutions in making long-term loans and to foreclose on delinquent loans (i.e. to dispossess individuals).

The proposed strategy, if implemented, could have a significant positive impact on the mental well-being of those who have fallen on financial hard times.

To the best of the knowledge, this is the first marketing paper that has explored the mental health of those who have defaulted on loans, and has proposed an alternative approach to making long-term loans that not only preserves the mental health of banks’ customers, but also protects the reputation and market share of banks.