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    In Desperate Need of Your Help

    Hi Great Minds at SA!

    I originally wrote a long post and for some reason it stated that it couldn't post.

    I will try to be as brief and to the point as possible:

    In late 2011 I became very ill, resulting in multiple days off from work and being short in my paycheck. As my illness was not related to worker's comp, I was not eligible for any financial assistance. I was not eligible for disability (to the best of my knowledge) as I worked sporadically. Prior to my illness, I had utilized my savings to pay for some necessary repairs (I had additional repairs that I had to also pay during the months of my illness).

    As a result of my illness, I ended up getting behind in bills which resulted in dings on my credit report. My friends and family were not able to help me at this time, due to the economy, their own bills, etc. I ended up turning to payday loans and a couple of high interest loans (130%) to pay for living expenses, my hospital and medicine co-pays, etc. Prior to this, my budget was pretty tight and did not have much room for short paychecks, emergency expenses, etc.

    I had never thought I would ever borrow money from a pay day loan as I dislike their practices, high interest, being primarily located in poorer neighborhoods, etc. I just felt that I had no other option. Also, due to my illness, I was not able to work a 2nd job (as I have often done to support myself---I make a good living, but have a high amount of debt incurred during taking care of a sick relative who has passed away, and helping a friend with rent, etc.).

    I feel so very ashamed and embarrassed about my situation. I have had friends that I used to see often sort of drift away once I got sick (it hurts even more because I helped a friend in many ways, including financially, during their own illness, but when I needed help, they were not around). I am also saddened because I grew up poor and had managed to overcome it with love from my parents (now deceased) and community members. Their support resulted in my beginning to work at age 14 (the earliest I could work in my state), being the first person in my family to attend and graduate from college, often working 2 jobs (not because I needed to, but because I was a workaholic---being sick also greatly affected my work sense of self-esteem), and being an emotional and financial support for my younger siblings, who are now grown, but have still reached out to me for help from time to time. Sadly, when I have asked them for help, they have not been as eager to help.

    I am greatly worried about my work situation, due to my illness. It seems unstable and I am just having some difficulties. I feel very afraid about the stability of my job, even though I am a good employee and this illness was the first I have ever incurred in my life. There is too much to go into now about the situation, I just wanted to note the worry and fear I am having in this aspect.

    I will be hopefully receiving some money (under $5,000) soon and for the first time, my mind is considering not paying down a bill (in other words, being what most would call financially responsible). As I have more loan debt and past due bills debt than the actual amount of money I am receiving, I am contemplating saving that money for my emergency savings, as I currently do not have any sort of savings---no 401k, no accrued comp time or vacation time, etc. I also do not have any sort of collateral or anything I could pawn to get needed money. During my illness I faced not having enough food, not being able to pay some utilities, not having enough gas to drive to work, having to borrow feminine toiletries from a friend, etc. I am so fearful of ever being in that position again and I feel that having an emergency savings would greatly help to alleviate this stress. The money I will be receiving would be about 3 months of rent, food, car note, insurance, and gas.

    What would you do in this situation? I am thinking of researching debt consolidation as a way to repay my bills. I also feel like after a couple of months of using my current income to add to my emergency savings and take care of car related items (registration, etc.), then I can work out repaying the pay day loans and high interest loans.

    I do not want to file for bankruptcy and am not sure what to do. I receive at least 10 calls a day from the credit card companies and pay day loan companies---I have had to turn off my ringer just because of the constant calling---which I totally understand they have a right to do. My goal is to have a family and to own a house in another 10 years. I am so saddened that my illness has left me in this financial difficulty and that some friends and family seem to not understand what I am going through (it could be because I have never been in this situation and the role has always been that I helped them, I was the person they could turn to, etc.).

    What would you do in this situation? I am not 100% well yet, and part-time work in the evenings and weekends is very hard to find right now. Once I am better I WANT to be able to work a 2nd job so that I can get ahead financially and pay off all of my debt. Right now, I am trying to focus on surviving as I really do not have anyone I can turn to for help, and I feel so embarrassed asking for help in the first place. Please understand that I do not want to be considered as someone who just doesn't pay their bills...that isn't me. I am just trying to focus on either having money for hard times, or risk being in a situation where I don't have money for the necessities....I went through that recently and found myself just avoiding family, friends, etc., as I felt stressed and despondent about the situation.

    Please help! Your advice is greatly appreciated.

    #2
    I also want to add that going forward, I want to use my paycheck only for the necessities--rent, food, car related issues (I need to keep my car due to the commute I have), cellphone (I dont use home phone), internet (when I was well, I did personal work for people online, and I use it as my tv rather than having cable), food, toiletries (nothing fancy, just the basics), etc.

    I do not feel comfortable listing the actual amount of debt I have, nor the amount I currently make as I am truly embarassed. I am very fortunate to be working and am ashamed that I had the debt I did prior to getting sick.

    I worry that this recent financial difficulties will impact my being able to have a simple life as a mom, a wife, a good worker, etc. I am so worried and don't know what to do.

    Comment


      #3
      I'm so sorry that you're finding yourself in this situation. As someone who has dealt with the headache and vicious circle of payday loans I can completely relate.

      I know that you're embarassed, but I honestly think it would be helpful for folks to see your debt and income as well as your expenses. People here are great at finding ways to shuffle money from expenses into debt. And it will also allow people to understand if bankruptcy might truely be the best bet for your situation.

      Comment


        #4
        Go ahead and post everything. I doubt anyone would judge, considering many have been there, done that and gotten the stamp to prove it. Besides it would really help people think/brainstorm ideas for how to best utilize the money. Perhaps in ways you haven't considered.

        I always have thought you only become smarter after you did dumb. I still have my shining moment of financial stupidity. One I just laugh over even now, perhaps I should start a thread.
        LivingAlmostLarge Blog

        Comment


          #5
          I think we need more info on your budget even though you don't want to post them. A detailed listing of debts and interest rates. Income, other expenses, etc.

          From what you posted, I would hope that you are not continuing to help pay your friend's rent. If you are, you need to stop immediately.
          Brian

          Comment


            #6
            Originally posted by merckie
            Have you tried debt counseling or debt settlement companies?
            Please, please, please read the thread at the top of this board before you even think about doing that.
            http://www.savingadvice.com/forums/d...companies.html
            Originally posted by bjl584 View Post
            I think we need more info on your budget even though you don't want to post them. A detailed listing of debts and interest rates. Income, other expenses, etc.
            I agree. It really is impossible for any of us to offer any useful advice without knowing what your situation actually is.

            From what you posted, I would hope that you are not continuing to help pay your friend's rent. If you are, you need to stop immediately.
            This is what really jumped out at me in your initial post. While it is very sweet of you to want to help others, it absolutely has to stop if it hasn't already. You can't afford to give away your money, give money to friends, pay to care for others, etc., if it leaves you unable to afford food.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #7
              Trying to not be afraid---payday loan co. Threatened me

              I am taking the goo advice that you have given me, and will post what I know, without actually having all of the paperwork.

              My take home pay is around $36,000 a year.

              I owe about $3,000 in payday loans (this may not include all of the fees) .
              The interest for these loans averages about $300 percent.

              I owe 2 high interest personal loans totaling $5,000, not including any late fees, accrued interest.

              I owe about $22,000-$28,000 in credit card/store credit debt. Average interest rate is around 20%. Even when I had better credit score, I could not get interest rate down. This debt and car debt increased more when I was caring for a friend and had hours reduced at work for a year due to budget issues in company.
              I owe $4,500 on car loan. High interest of 30% due to it being a title loan used to pay for car repairs and friend.
              Rent is $950 a month.
              Gas is $180 a month.
              Toiletries are $40 a month (soap, feminine items)
              utilities are $200 a month
              Medicine/dr appt is $75 a month
              Insurance is $150 a month
              parking is $150 a month (no st parking available)
              food is about $200-$400 a month
              school loan is $60 a month
              I feel very ashamed and I am very close to thinking that filing for bankruptcy is my only option.

              I'm also so afraid as a payday loan company called me saying they were threatening legal action. I looked their company up online, and they aren't licensed to practice in California, and they will refuse to accept a money order payment---they only want cc or withdrawal from bank account and people have left comments that the company takes more than the loan repayment agreement states---they have already done this with me as they deposited the loan without letting me know the terms, if I had been approved, no online or paper signature, etc.

              I just don't know what to do. During my illness I became reclusive as I wasn't even well enough to walk or even drive.

              Has anyone here gone thru bankruptcy? What can I do? My nerves are frazzled by the constant calls---more like 20 a day----even into night time and on Saturdays.

              As for my friend that I am helping, it's difficult because lately he has helped with the food expenses, as I did not have enough for food.
              I'm in desperate need of your advice.

              Comment


                #8
                Forgot to add that the friend I am helping who now lives w/ me has only been able to help with food and doing chores around my place when I have been too ill to do it. He is out of work and hasn't been able to find work. I have paid for his cell phone as he said he would pay me back and needs it for possible job leads. I know I shouldn't have, but I felt like I didn't have an option. My friend also needs money for his dr visits, so it is very hard. I've been under so much stress that Ive been trying to avoid arguing w/ him as he says he is trying to get back on his feet and has no family or friends to help him. I know, I know. My friends don't like it but he has helped emotionally when I was sick . I have told him that as long as he pays for his own needs, he could stay w/ me to get back on his feet. He sometimes gets emotional/cries or gets angry. I don't feel strong enough to deal with it right now.

                Comment


                  #9
                  Originally posted by FrugalChick View Post
                  My take home pay is around $36,000 a year.

                  Rent is $950 a month.

                  food is about $200-$400 a month

                  the friend I am helping who now lives w/ me has only been able to help with food and doing chores around my place
                  I have paid for his cell phone
                  I felt like I didn't have an option.
                  My friend also needs money for his dr visits
                  I think there is a lot of room for improvement but a couple of things really stand out.

                  Your rent is WAY too high for your income. Rule of thumb is 28% for housing. You are probably closer to 40%. You need to be searching for a cheaper place to live, most likely renting a room somewhere or sharing a place with several other people to limit your costs. Under $700/month should be your goal.

                  Food is kind of high. $200/month isn't terrible though you could do better. $400/month is definitely way out of line.

                  It sounds like a big problem is that you don't know how to say no. You say you felt you had no option but to give money to your friend. Of course you had an option. When he asked, you could have said, "I'm sorry but I'm struggling myself and can't afford to help right now." You've borrowed money at 300% interest so that you could pay somebody else's cell phone bill! Even if he does get off his butt and get a job and repay you, is he also going to repay the 300% interest you've been paying on that money? I doubt it. He will just repay the amount of the bill - and I highly doubt he'll ever even do that.

                  I say give him notice that he needs to be out by the end of the month because you are going to be moving soon. Start scouring the classifieds and craigslist for rooms for rent and find yourself a cheap place to live.

                  If you can knock your rent and utilities down by $300 or more, that's money that can go straight to the high interest debt.

                  Can you put the school loan into forbearance due to financial hardship? That would free up another $60.

                  What about the car? How much is it worth? What is the monthly payment? And what about parking? Could you get to your job with public transit? If you sold the car, you'd eliminate the car payment, the parking expense, the gas and the insurance. That's several more hundred/month for debt reduction.

                  I don't think this situation is as dire as you may believe. It will take some serious sacrifices for sure but I think you could clean this up within a year or two tops. You make a decent income for a single person. Keep in mind that the median household income in this country is right around $50,000, so lots of people are supporting a family on that amount. You should be able to support yourself on 36K.

                  Keep posting here with your progress and any questions that arise and we'll all support you along the way. I would also pick up a cheap copy of Dave Ramsey's book The Total Money Makeover. You can get it on half.com for a couple of dollars.
                  Steve

                  * Despite the high cost of living, it remains very popular.
                  * Why should I pay for my daughter's education when she already knows everything?
                  * There are no shortcuts to anywhere worth going.

                  Comment


                    #10
                    Where I live my rent is very very cheap. Most people I know pay this much for a roommate . Also, I have rent control and I don't have the money even to move. At $11,400 a year, I'm paying around 33% of my take hone pay. Still higher than the no more than 30% recommendation, but I am very fortunate to live where I do, have rent control. I plan on trying to be in my apartment as long as possible---until I am able to get my own house or I get married and my hubby and I move somewhere. I also would need a good amount of money to take my stuff from a 1-bedroom and put it into storage, plus a deposit for the roommate situation.

                    I was able to get school loan deferred. So I am able to save the $60.

                    You're right about the food. I could go down to $200. The $400 was for 2 people.

                    As for my car, I have to commute to work. The cost of my insurance and parking and gas is a bit more than doing a commute, but having a car has also allowed me to do some side jobs and to do my personal business (when I was feeling well) that requires me to drive far outside of the city, usually on the weekend. Not having a car would severely cut down on my getting a 2nd job options. Also, my commute with my car is less than 30 minutes. My commute via public transportation is 90 minutes, at least.

                    I have asked my friend to leave----even though it means I won't have any food until maybe next week. I haven't really told my other friends, but the male friend staying with me gets either very sick with vomiting or anxiety, or gets very angry and threatens me. After he has calmed down, he then apologizes and says he would never really hurt me and that he was just mad and didn't know how to respond, he was afraid, etc. I know that logically I don't need to have someone like that in my apartment. And I also really fear him at times....he has said he would try to obliterate me, make things more difficult for me financially, etc. Yesterday he agreed to leave because he said that he felt I looked down on him because he is sick and homeless. I have told him over and over that I only judge him by how he treats me and how he treats others and that I cannot depend on him for help, but when he asks for help, I have always been there. When I have not been able to help w/o really putting myself last, he has gotten very upset and threatened me. He has a history of working with the police in his city, and says people would believe him more than me. Yesterday he said he would leave in the morning, that he had lost his motivation to go and find work, and he needed to be by himself to get that motivation back. But as usual, when I woke up this morning, he was violently throwing up in the bathroom (I think he gets anxiety about leaving and he has a problem w/ anxiety that causes him to vomit). He also is having problems with his food stamp card.

                    The call from a payday loan company yesterday really frazzled me----the representative threatened legal action saying it was fraud. I've read online at consumer affairs that this company refuses to take money order payments cause they want to be able to debit what they want---AND they won't send a paper bill saying that it would cost $35.00 and require either a checking account and routing number or credit or ATM card they could debit. I feel that they are scam because they aren't licensed to provide loans in California, AND they deposits the $350 loan w/ the $150 interest charge without telling me terms or percentages, and without my physically or electronically signing a promissory note. So many people have also complained that the representatives call the borrowers job and state that they are asking the Sheriff to come and arrest the borrower for check fraud, etc. Currently, my bank account is overdrawn and I cannot even use my account for them to debit any money. I have read that they just continue to debit money almost weekly from a borrowers bank account and that they just tell the borrower it is due to fees, etc., or they won't answer the question NOR provide a bill. For some reason no one has been able to shut them down. I saw a cease and desist complaint legal note about them, but not sure what I can do to get them to provide the amount I owe, and let me pay it back.

                    I am so afraid...I am just trying to get back on track at my job, and get back to my old life. I am thinking that if Bankruptcy will help reduce some of this stress, and be off my record before I am 45, then I might be willing to do it. I am also considering it as an option as the payday loan people are not into accepting payment plans, etc. They want (rightly so, I understand) the full amount due at once...which I won't have, even when I receive the extra monies.

                    Please help as I am just stressed beyond belief. This is wearing me down more than I would have imagined.

                    I'm beginning to freak out---I don't want to go to jail as I had no intention of not paying.

                    My car is definitely owed more than it's worry. With my credit now not sure I could get another one, plus there is title loan.

                    I am really considering bankruptcy. I know it will ding my credit, but right now it it very poor. I'm just getting worn down by the constant bill calls. I also need to get my emergency savings up so I don't continue to have situations like where I am in now where I only have gas for 1 week, no money for food , and can't see my dr because I can't afford the copayment or prescriptions.

                    Please help.
                    Last edited by FrugalChick; 03-08-2012, 08:31 AM. Reason: wanted to add better information

                    Comment


                      #11
                      Right now I am afraid of the pay day loans threats. Can I be arrested for getting behind in my pay day loans? I don't know what to do and am having a hard time concentrating and trying to keep from crying at my desk, etc.
                      Last edited by FrugalChick; 03-08-2012, 08:32 AM. Reason: more information

                      Comment


                        #12
                        NO. YOU CANNOT BE ARRESTED FOR NOT PAYING THOSE PAYDAY LOANS!

                        They hope you will believe that lie if they are telling you that.

                        You have so much stress right now.

                        You have got to calm down and make a plan.

                        Serioulsy would possibly wonder if bankruptcy would not be an option.

                        People with medical problems usually end up having to file - you have
                        not mentioned your co pays or if hospital is calling for their money.

                        Do not (as suggested) help anyone out for now. Just for a while. You have
                        helped people and they have helped you a bit. It is time to stop that until
                        you have a workable plan.

                        You are a giving person but right now you have to put yourself and your health
                        first.

                        Your friend who stays with you is understandably worried but I don't like the
                        way he is being rude and putting it all on you and manipulating you. He should
                        be grateful for the help you have given him. If he were a calmer roommate it
                        might work out, but he is going a bit far now with how he is treating you.

                        With your next bit of money get the most basic survival food - you mention there
                        is nothing to eat: a bag of cornmeal, dried beans, onions, orange juice, some
                        pasta and spaghetti sauce, plain oatmeal. Get the generic. That is the cheapest
                        menu and you would always have something to eat even when you run low on money - even
                        eat oatmeal for dinner - at least you are not going hungry.

                        You might try the super budget plan and other suggestions and put off bankruptcy but
                        would not rule that out as an option.

                        Make some rules for yourself and don't give away any money or pay any bills for anyone
                        now - help out in nonmoney ways if you must - but your financial survival now is what
                        you are working on.

                        Comment


                          #13
                          First get rid of the freeloader who isn't a friend since he threatens you. Move his stuff outside, then change the locks. Then move forward from there
                          LivingAlmostLarge Blog

                          Comment


                            #14
                            Thank you for your comments. My friend was supposed to leave this morning. But he got sick (again) and his foodstamps haven't come yet, so he was not able to leave. I felt he was being rude to me this morning and asked him to leave, but he said he needed time to get himself together. I was so mad because he knew I couldn't wait as i was already running late for work. I ended up running out in tears. He also tried to make me feel guilty by saying that I supposedly said things last night that all or most if his other friends have said when they no longer wanted him around. He tried to make it seem like he is sick and i'm kicking out a disabled person. he saud he would leave tomorrow morning, but I'm not sure.

                            I talked to one of the pay day loan companies and they want $590 from me----not including the $350 in interest theve already received on the $350 loan. But they are willing to make $100 a month repayment plans.

                            My boss is super hard on me and Im just so stressed. I hope I can just rest this weekend.

                            Comment


                              #15
                              Sorry you are living through this.

                              First off, a 300% interest rate is most likely illegal. I'm canadian, here 60% is the legal limit and it is a criminal offence to charge more. I know that in the US, the legal limit is set by each state. You'll have to do some research, but if that 300% figure is right, it is very likely illegal.

                              In general, I'd advice to stop letting people boss you around. Your creditors and your roomate/friend are both intimidating you. I'd get rid of your roomate/friend by whatever means necessary, including calling the police. I'd tell your payday lenders to stuff it if the rates are illegal. Let them take legal action on usuary rates. If you do repay them, negociate. I'd threaten them with bankruptcy and offer substancially less to settle (make sure you get a full written release from the whole loan if they agree).

                              Lastly, this is an internet site. We don't know you or your circumstances very well. What you need to do is remain calm and rise above this situation. You CAN handle this. Take the advice that works for your situation, but YOU are in control.

                              Comment

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