Dear Debt Adviser,
I am 59 years old and about $25,000 in debt. My bank account has a negative balance of $800. I fell into this mess by helping family, and now I’m wondering how to get out. I don’t make enough to cover all my bills, and most of the time, I can’t even afford groceries. I work 30 hours a week. Because I have to work a variety of schedules, I can’t get another part-time job. I hide it from my grown-up kids because I’m ashamed, and I don’t want them to find out. I am so depressed and worried all the time, I just don’t know what to do. I need help badly. Thank you.
— R. Suska.
Dear R. Suska.,
You absolutely cannot go on helping family members financially. You have been doing so at your own financial peril, and now you’ve slipped over the edge. You must stop. You can offer all the emotional and physical support you want, but you need to work on solving your own financial problems right now. Since your family was part of your problem, I suggest you make them part of your solution. You gave generously to your family. Now it is time for them to give back in your time of need.
Reality begins with being frank and open. Tell everyone who took money from you to give it back. They may be shocked, or they may be glad to help. Either way, you’ll know for certain exactly where you stand and who is there for you. I also want you to explain what happened to your kids. They won’t think any less of you for telling them the truth. In fact, I believe this will be an invaluable lesson for them.
I also want you to develop a spending plan for your current income. Write down all your expenses, and if your income does not cover everything, you will need to make a decision on where to cut. Shelter, utilities (the basics, not premium cable TV), auto, insurance and food should be paid first, and then your other obligations as you have money to pay them. I know it may be tough, but you need to try and secure a better-paying job. Maybe you could look for a different part-time job with more consistent hours that would allow you to add a second part-time job. The only way to resolve your financial crisis is to increase income or decrease expenses. And a sound future is more likely if you can do some of both. Use the money your family will give back to you as a start.
Determine if your spending plan and a new job will allow you to keep up with the minimum payments on your $25,000 debt. If you can’t, contact your creditors and let them know why you cannot make payments. You may qualify for a hardship program that would allow you to make lower payments while you are looking to increase your income. If that doesn’t work out, see a bankruptcy counselor and attorney about your legal options.
You said it best: This is a mess. So expect any solution to be messy. Stick with your reality-based spending plan going forward, and your future reality will be much better than it is at present.
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