My finances are a wreck what can I do?

I'm 24 years old and I'm $40,000 in debt. I haven't had a steady job since October 2004 when the company I had been with for 3 1/2 years downsized. I've supported my family, including my grandfather with hospital bills, my mother with rent, my brother with college, my grandmother with bills after my grandfather passed. I have $13 to my name right now. Fast food companies and stores like CVS or Macy's tell me I'm overqualified and ad agencies, law firms and companies like that tell me I'm underqualified. No one will hire me. I'm talented and smart and I'm willing to work my behind off if given the opportunity. The only catch is $13 is all I have and 5 pair of jeans and 2 shirts. I was going to file bankruptcy but I don't know how and I'm sure it takes money. I was going to try and get a grant but I don't know how and I'm sure it takes money. Emergency assistance places don't seem to think I need the assistance. What do I do?

Denise, I really empathize with your situation. With the amount of debt your facing you probably are a candidate for bankruptcy. However, I would go to your local branch of Consumer Credit Counseling Services first (the bankruptcy court often requires you to do that anyway with the new bankruptcy law). They will help you decide if they can do an informal debt relief plan for you or whether you're better off to go straight to bankruptcy. They will also help you with budgeting and money management issues too. Much of the advice will be free (they are a non-profit organization) although a "workout " plan willl cost you a flat fee. CCCS is one of the most reputable of these non-profit debt assistance organizations, and I recommend them.

Good luck to you.

Perosonally, I think your best route is "Bankruptcy". I know some people frown on bankruptcy. But at $40,000 in debt without filing bankruptcy, you'll be paying this back forever.
Look in the classifieds in the paper, and find one of those attorneys who will file for you at $200.00 - $400.00 (Yes, they're legit. I did it 20 years ago).

Then get each of your relatives, whom you've helped so much, to help put together the money.

If you don't file, you'll be over 45 yrs old by the time you finish paying it off. That's a long time. And let's get real...emergencies keep happening along the way in life, so you dont need to be tied down in a lot of debt for years and years. The bankruptcy court these days normally will make you file chapter 11, and will work with your credtors to accept a small amount without interest, which will leave you with money to live on.

But due to the fact that you are out of work and have no salary for the court & creditors to work with, you may qualify for "Chapter 7" which means total liquidation of debt without paying anything back. Be sure to mention this to the attorney.

Well, that's the option that I see. Otherwise you'll be strssed for years trying to pay that money back. People are going to tell you that your credit will be ruined. And it will,... for a while.
But as years go by, your credit score will gradually creep up again. Good luck.

I right along with you. Same boat. No money, no job. Moved to find a job and now I'm sinking in debt. I'm considered over qualified too! I have applied for over 70 jobs in the last two months. I'm behind in my rent over 5 grand. Expect to be evicted and homeless soon. I have a daughter starting college in three weeks. My life is a mess and I don't know what to do other than pray. No one will give me a loan since I don't have a job. I'll pray for you and you pray for me. There has to be an answer - I just don't know what. Good luck to you and God Bless.

That is quite a wreck alright. To start with, while it is honorable to help support your extended family, you have to be able to take care of yourself and your immediate family first. That means no longer paying bills for able-bodied family. If your brother wants to go to college, he needs to pay for it himself. Your mother needs to pay her own rent. Same with your grandmother. I know that is hard and there will be resistance when you tell them you can no longer afford to help them, but you have $13 to your name. Sooner or later, you will not be able to borrow any more money to help them anyway. They need to support themselves.

As for your current financial crisis, you need a job, any job as soon as possible. I don't know what position you were applying for, but Walmart and McDonalds will hire anyone that is willing to show up on time and work. Get a job for minimum wage if necessary. Once you have a temporary job, continue to look for jobs in the field where you would like to work. If you are under-qualified, educate yourself through reading and school. With your income level, you should qualify for grants at your local community college, and grants don't cost any money. Look for an internship (paid or not) with a company you would like to work for. Many companies hire full-time employees from their interns so it is an excellent way to get your foot in the door and add to your qualifications.

For your debt, the first thing to do is stop borrowing money ASAP. Once you have a job, take care of your basic necessities first - food, clothing, shelter, transportation. That doesn't mean filet mignon, Polo, high-rise apartment, and Lexus. It does mean ramen noodle, Walmart, cheap and safe apartment, and public transportation or a paid-for car. If you have car payments, you need to sell the car. You can't afford payments right now. Get a $1000-2000 car.

Next, with whatever money is left over, you need to start saving some money for emergencies. Ideally, you would need $500 - 1000 to start with. Do whatever it takes to come up with that money. Sell stuff. Work a 2nd job. Do odd jobs. This money is to be used for emergencies only. Then with the money left over after necessities and savings, divide it up among the debts and pay that much every month. It is likely not going to cover the minimums but that is the way it will be. Let your creditors know your situation, what you are doing to get back on your feet, and that you intend to repay the debt when you can. They won't care, but you owe them money and you are obliged to at least inform them.

You need to get on a written budget also. Your money will go farther if you figure out where every dime will be spent before you have it. This isn't an easy task especially with irregular income, but after a couple months, it will become easier and easier.

www.daveramsey.com and Financial Peace University can give you the tools you need to get through this.

Contact Legal Aid.