Updated on 09.17.14

Walking Through A Financial Horror Story

Trent Hamm

Every once in a while, I receive a story of a person who has slowly backed into a desperate financial situation. Usually, it’s pretty easy to root out the cause, so I often don’t share these horror stories with the world. Yesterday, though, I received a frightening email from a reader who laid out an incredibly painful story fraught with bad insurance choices, an overbearing parent, bad debt decisions, depression, sickness, and more. Let’s move through Maggie’s story piece by piece and see what advice we can use to help her out.

I am in way over my head in credit card debt and a personal loan… about $60k worth and growing.

Maggie has extensive personal debt right out of the chute, ignoring everything else. Likely, with that amount of personal debt, some of it is quite high interest.

I was on disability as of last September thru December for major depression. When it came time to decide if I was going to go back to work, go into long term disability or separate from my company, I did the stupid thing and left. This in actuality was a good thing for my mental well-being, but horrible for my financial situation. I didn’t think I would be unemployed for as long I as I was.

Maggie has some issues with depression as well. While I realize that clinical depression is a pretty severe medical condition, I do also know that debt can be an emotional drain. Also note that not going back to work at her previous job was identified as a good thing for her mental well-being, so it’s fair to conclude that Maggie was very unhappy at her previous job.

I just got a job this past June. So in essence I was without a paycheck since last October. I had a good deal of debt at that point but it was manageable. I was doing odd jobs to pull in money, but it was very small amounts, $100 here and there. I started living on the plastic and used one to pay off the other, etc. I was trying to clean up other parts of my life and get my mental capacity to be stable enough to take on even trying to look for work, which I didn’t really start doing until the end of February and not super seriously until almost April.

Maggie essentially took a six month period here in which she lived entirely on plastic without seriously looking for work. That’s going to be a huge financial drain for anyone. While part of me wants to say that she should have been looking seriously for employment from day one, that’s water under the bridge at this point.

I have a good and stable job right now with Columbia University, but I’m still waiting to become permanent (90 days and all that) and to get benefits.

Now, though, she has a full time job. This should enable her to start making a dent in fixing her earlier financial mistakes.

The problem is that I can’t afford my payments anymore and I am totally maxed out. I am also making less that I was, which is hard too.

In a nutshell, Maggie’s lifestyle for the last several months has far outstripped her income. It’s time to cut back big time.

Steps to Cutting Back and Saving

1. Learn how to live cheaper

Cut out every single bit of extraneous spending from your life. Get rid of cable television. Sell your car. Do whatever you have to do to lower your monthly expenses. Here’s a list of forty ways to reduce your monthly spending.

My rent is about 1100/m (i live in ny), phone $62, gas/tolls $350, electricity $80, food $200 and my paycheck at the moment is about 1140 biweekly. However, once the benefits kick in, I’ll have to pay union dues and health care. So potentially, I could lose up to another $200/m.

Her required living expenses right now add up to $1,792 a month, while her income after the benefits kick in is $2,270 per month. That gives only $478 a month in breathing room, and that $478 includes all debt repayment.

2. Get rid of some expenses

You’re on the campus of Columbia on a daily basis, right? Use internet telephony (get a Skype account) to talk to friends and family and ditch the $62 a month for your phone. If there’s a subway entrance – or even a commuter rail line that gets to Grand Central – near where she lives, she should ditch the automobile, sell it, eliminate that $350 a month expense, and use that money to get rid of some of the most pressing high interest debt.

On top of that, I have MS, so I figure I will have doctor visits and medication that will tack on extra costs to my cash flow. Having the condition also makes it difficult for me to take on a second job because I can’t really handle too much stress or letting my body get too run down. The other problem is that a second job probably still won’t be enough to allow me to make my minimum payments.

3. Work with your employer

See whether or not your job at Columbia can be used to get treatment at the Columbia University Medical Center. Many universities associated with a medical school have very inexpensive or free care at the university’s medical center.

The more I keep looking into things, it sounds more and more like I should file bankruptcy. I’m 28. I really don’t want to file, because I’m afraid they’ll touch what I’ve built up in my retirement funds.

There are retirement funds?

My family and friends can’t really help me, because no one really has extra cash lying around, and besides that, I’m terrified of telling them, embarassed, ashamed, and hate asking for help.

4. Kick your pride to the curb right now

If pride is keeping you from being honest with people who love and care about you, pride is doing nothing more than standing in the way of you moving forward.

Normally, I wouldn’t care and would do anything to get rid of that debt, but my dad handles my IRA’s. He is the bain of my existence, a super control freak, and has the power to easily knock me back into depression.

So there are family issues involved here, too. If you’ve earned the money, how does your dad control your IRA?

5. Get control over your own money

If you are actually being blocked from accessing or managing your own money, look for legal resolution. Seriously. This is a very unhealthy situation. As a functional adult, you should have control over your own assets.

Once you get control over your own assets, you need to look at the tax penalties for early IRA withdrawal. Generally, you’ll have to pay a ten percent penalty to withdraw this money early (unless it’s a Roth IRA, in which you can take out your own contributions without penalty), but in your situation, it may be worth it.

Is there anything else I can do? Is debt negotiation or settlement a good thing? Is there a way to get my debts down without touching my retirement funds? On top of that, how do I know who’s a reputable company versus people who are trying scam me? I’ve got nowhere to go.

If you declare bankruptcy, your retirement funds are quite likely exempt from the creditors, so that shouldn’t be a concern. If you are truly so far in debt that your IRA funds wouldn’t save you, you should likely consider bankruptcy, because credit counseling is likely not going to save you either.

Right now, you’re in a situation where basic living expenses are eating up 80% of your income and you have ongoing medical expenses as well. Something has to change in this scenario – it’s not tenable in the long term regardless of whether you can dig out of this debt situation. Here are some potential solutions to the situation, but most of them will require you to suck up some pride.

Other Potential Solutions

Know how bankruptcy works in your state

You may need to ask for legal help. See if there are opportunities for free legal help available to you as a Columbia employee. Lay out the situation and ask whether bankruptcy is right for you.

Move back home for a while

From the way your story sounds, you do have family that live in the area. Look into moving in with a family member for a few years until you can get your career and your financial situation on track. You can offer to pay rent if that makes the situation more comfortable.

Look at living in a less expensive part of the country

You didn’t specify what your job is, but you did specify it was at a university. Are there universities in the Midwest or South that offer similar programs? There are several good universities in Iowa, for example, that may have jobs in your specialty. If you’re saying “no” to this even without knowing there are jobs available, ask yourself why you’re immediately saying no.

Hopefully, readers will have more good suggestions for Maggie.

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  1. Indeed, that is a horror story. Good advice though, Trent. I suggest Maggie make her non-financial #1 focus on mental wellness, as that is her only way of staying the course and earning to pay off her massive debt(s). Extremely simplified living is going to be necessary for years to come, in order to pay things off. Roommates, roommates, roommates; get those living expenses down.

    Also, working at a University is a GREAT gig. I suggest she take FULL advantage of the facilities etc. that are available.

  2. John says:

    I understand the aversion to declaring bankruptcy but it is there for a reason! I would look into declaring bankruptcy.

    My wife had a massive amount of consumer debt and we decided that she should declare bankruptcy before we were married. It was the best decision that she could have made, I firmly believe that.

  3. lori says:

    I suggest that Maggie go to Consumer Credit Counseling through United Way. They can negotiate with her creditors – often for a lower rate than what she may have now. She will then be able to make one debt payment per month. I think Maggie needs to keep things as simple as possible, both for her finances as well as her state of mind. God bless and take care, Maggie.

  4. Greg says:

    I concur on the rent expense, I live in NYC in a fairly trendy area for 550/ month. Go on craigslist and look for available rooms, focusing on something as close to the job as possible. This will also help with the electricity bill.

    I think selling the car is the way to go also. It’s too much of a money drain.

    So $2270 per month:

    minus rent – $700 (for a shared apt + utils)
    mins food – $200
    minus subway monthly card – $76
    minus misc – $400 (clothes, entertainment, other)

    You’ll have ~890/ month left over. Because you work for a uni, you’ll have access to cool things like computers and library (books, magazines, movies).

    Do the calcs and see which bills are best to pay off first and attack them. It looks like you may have to take a second job if you want to get through these bills quicker.

    Good Luck!

  5. MS says:

    I wish Maggie all the best in her road to recovery. In addition to the advice already given, I would encourage her to re-negotiate the rates on her loans as low as she can. Letting them know that there is the possibility of bankruptcy may give her some leverage there.

  6. dong says:

    I don’t think Maggie is in a bad enough situation to declare bankruptcy. She’s in no danger of losing her home or being out on the street.

    I do think she needs to reasses her living situation. NY is expensive, and it sounds like she’s living alone outside of Manhattan. I would actually advise her to move closer in, but into a roommate situation, and ditch the car. It’s a drastic move, but one that could easily save her over $700 a month. Plus not having to drive into the city for work might be great for the mental health.

  7. Elaine says:

    I’d also suggest looking for a place with roommates, within walking or biking distance of work. Another benefit of that is your commute doubles as exercise, which many people find helpful for depression. I know my mood is always much better when I’ve been biking instead of bussing to work.

  8. Anon80 says:

    I don’t think she’s in a position to declare bankruptcy as well. She makes decent income, it’s just going to take a lot of work on her part to see things unravel. Even if its years down the line. She’s only 28 and still has a long life ahead of her. Bankruptcy will stay with her for 10 yrs.

    Get a roommate or move, $1,100 is way too much to be paying on rent especially if you’re living alone!

    My suggestion is knock down to 50% from the 80% being spent on living expenses. Slash that $200 food and groceries down to $100, there are hundreds of ways to make fulfilling meals off of $100.

    Get rid of the phone as Trent suggest as lastly, find ways to cut that gas/tolls. $350 is extremely high.

    don’t declare bankruptcy. in respect, your credit may be shot, but it’s never dead. it’ll take time, but it can be rebuilt.

    keep track of all of your finances, make sure you know where every single penny goes. at the end of the month, go over what you spent, what you can cut on, or even what you spent too much on so you can watch it the next month. at the end of each quarter do your own quarter report that lays out all the money you spent and made and compare it with your past spending. if you see it written out and put in front of your face, you can make wise decisions from there. it has worked WONDERS for me.

    i don’t suggest bankruptcy at all but i do think it’s time to really crack down and fix everything that’s broken. if you’re up for the long haul.

  9. !wanda says:

    It sounds like at least some of her close family members stress her out, so I don’t concur with the advice to move in with them even if it does save a lot of money. When your family is close, it can be the best source of comfort, but if a family member doesn’t have your best interests in mind, no one knows better how to get under your skin and wound you.

  10. Avlor says:

    I have to agree with !Wanda for the most part. From what Maggie said, I don’t think she should move in with her parents. Roommate is preferable.

    Now keep in mind there’s ALWAYS more to the story than is first told, too. It sounds like the parents are too controlling. But we haven’t heard their side.

    From a parent’s perspective – I tend to be most controlling when I see my kids heading into something that isn’t good. (I.e. not making the decisions that I think they should.) Its really hard to let kids make mistakes. But this dad has to let her choose and let go. That’s the only way she can learn the important lessons. The best thing she can do is simply show him she’s making good choices. (Don’t bother telling him, unless his eyes need to be opened. Trust takes a while to reform. For example I’d tell him when – she’s been working on a plan to fix her problems and not taking on debt for several months and he’s still not getting the picture.)

    I don’t suggest bankruptcy. It’s not usually the escape people expect it to be.

  11. “I don’t suggest bankruptcy. It’s not usually the escape people expect it to be.”

    Couldn’t have put it better myself. Great wording, Avlor.

  12. Donna says:

    I concur with everything Trent’s said, with this additional unsolicited advice:

    Get your retirement funds and your life away from your father. It’s clear even from the tiny snippets Trent’s sharing here that he is a toxic parent and is not good for your physical or mental well-being. Get a roommate — DON’T move back home. And really consider whether, if you believe your father has the ability and power to throw you into depression, whether (a) he actually has that power, or whether you give it to him, and (b) whether you can continue to have a relationship with him AND keep your sanity.

    My very best of wishes to Maggie.

  13. Alexandra says:

    I speak from experience on this — it’s actually a lot harder to handle financial problems when you are disabled or dealing with a health problem like MS. For example, using internet telephony is not likely an option, you need your cell for health emergencies and coordinating Dr.’s appointments, and it’s hard to cut back on your grocery bill if your illness leaves you too drained to cook. I used to be extremely frugal — I thought cell phones were a waste and even made all my bread from scratch, but had to change my ways once I became disabled, which unfortunately, was also the time my income dropped to a measly social security check.

    I think the roommate suggestion is not a bad one, since it could cut down on bills, but really, that isn’t going to drastically change the numbers here. I would try to look for some easy, part-time jobs that don’t take a lot of time or energy (tutoring, editing, etc., if you have the background, or maybe babysitting or dog-walking).

    I think step one should be negotiating with the creditors, and seeing if a reasonable plan can be arranged. The creditors will probably be willing to settle for something less than full repayment if they know that bankruptcy is plan “B”.

  14. Amber Yount says:

    Wow her expenses are outrageous!

  15. Jenifer says:

    I agree with Alexandra’s comments above that Maggie should not give up her cell phone due to her illness.

    As many others have suggested, finding a roommate near Columbia University could make for significant savings each month and increase Maggie’s funds. A quick search on Craigslist under Rooms & Shares with “Columbia” as a keyword offered numerous rooming options within walking distance of the University. In addition, most were under what Maggie is currently paying for rent. This would automatically save her the $350/month for her car and commutation expenses. She would also save on utilities since they would become shared expenses.

    Additionally, the Upper West Side has great food markets like Fairway for stocking up on healthy and reasonably priced (for NYC) groceries.

    Good luck Maggie!

  16. Amanda says:

    You can get a roommate situation within walking distance of Columbia for about $900 or move to Inwood (hey, there are nice parts of Inwood) for about $700 if you look hard. If the commute is not an issue there is always the Bronx, which is generally closer than Brooklyn or Queens.

    She can sell her car and pay $76 a month for a metrocard which will get her almost anywhere she wants to go (except the ‘burbs) if she moves closer into the city. Until her insurance kicks in, there’s a clinic at Columbia which provides urgent care for students, and probably for staff as well. The Office of Disability Services is helpful in this regard.

    Morningside Heights is a really expensive neighborhood to buy groceries and stuff in, but if you go to Fairway you can cut down on expenses a bit. I don’t think $100 a month is going to cut it as a food budget in NYC. I’ve never been able to get my food expense below $250. Oh, the meal plans are also open to staff, so that might be helpful if you can’t cook. The more meals you eat there the cheaper it is, but since I’m never on campus I haven’t looked at the rates in a while.

    Skype isn’t an option with ongoing medical problems (I concur with Alexandra, and speak from experience – Skype is not really helpful if you’re stuck somewhere and need to call an ambulance) but there _are_ “emergency only” cell phone plans Maggie could look into.

    Believe me, the last thing Maggie should do is move in with relatives. My family is similarly toxic, and a roommate situation is far preferable, if only from the mental health standpoint.

    Best of luck to Maggie.

  17. Sharon says:

    I live in NJ across from NYC and I don’t think her expenses are that outrageous. Yes, the rent can be reduced by looking at roommates or a studio. And the gas/tolls can be reduced by using the subway. She might also look and see if she qualifies for a “disabled” rate for the subway.
    I thnk she should go to Columbia University and see if they have a listing for student housing…places that are cheap and close to the university.
    Maybe she can use the graces of her parents/family for storage of some of her things while she gets her housing/debts together.

  18. Amy says:

    “If you are truly so far in debt that your IRA funds wouldn’t save you, you should likely consider bankruptcy, because credit counseling is likely not going to save you either.”

    Not true. If you’re really considering bankruptcy, your creditors are going to suddenly get much more willing to work with you. They’d much rather be paid back slowly, or paid back partially, than not be paid at all. A good credit counseling service can help you develop a payment plan that will get you back on your feet. Often there will be penalties – you’ll usually be paying the debt back over a longer period of time – but this is definitely something worth looking into.

    As a general rule, look for a non-profit rather than a for-profit counseling service. Your HR department may have recommendations, but check them out with the Better Business Bureau.

    “Know how bankruptcy works in your state.”

    Actually, bankruptcy laws are subject to federal jurisdiction, which means they’re the same in every state.

  19. Nick in Iraq says:

    I would definitely make it a priority to get your money under YOUR control, not your father’s or anyone else’s. With so much debt, you are really going to have to work at it. It’s tough, but it’s not impossible. Best of luck!

  20. Dan says:

    I’m going to jump on the move-out-of-your-apartment bandwagon. I live in New York and know very few people who are paying over $1000 a month in rent. It will certainly mean getting a roommate (although if you’re paying $1100, you probably already have one) and might mean moving out of Manhattan, but it will be worth it if it means that you save $300 or more each month.

    And get rid of the car.

    You’re easily looking at $600/month subtracted from your expenses.

  21. Louise says:

    I think it’s a bad idea for her to give up her phone, but she ought to consider a pay as you go plan, or dropping to a lower cost plan.

    Getting rid of the car will save far more than the gas and tolls money, it will save in parking costs and regular car maintenance costs which weren’t factored in and surely are considerable. Not to mention whatever she makes from selling the car!

    Food can probably be dropped down too, but it takes a while to adjust to cooking at home and stocking the right groceries. It also takes a positive mindset to successfully cut food costs. I’m the kind of person who sees generic/store brands and thinks, “awesome, I’m getting the best price!” instead of thinking “How depressing, I can’t afford name brand.” Silly. It’s food. I can’t afford to get ripped off, is what I can’t afford. It’s very easy for cutting food costs to be overwhelming and depressing because it’s something you have to consider several times a day. Work on this gradually so you don’t overwhelm yourself.

    I think the roommate suggestion is great, but I think it’s pretty hilarious how recently people were furious that Trent suggested looking for cheaper housing in NYC and today everyone’s shocked that Maggie is throwing away $1100/mo on rent.

  22. Jane says:

    I am dubious about how serious this emailer is about really doing what it takes to get out of debt and to take control of her finances and act like and adult about them.

    First, she concludes that even if she gets a second job that it won’t be enough to pay her debt payments. That is ridiculously presumptuous and likely inaccurate, and it sounds like another excuse to avoid getting a second job. Lots of second jobs pay really good money — you can easily make over $1000 a month extra by waitressing or cleaning houses or working tons of other jobs only on the weekends or a few nights a week. And you can earn even more money by working overtime in some jobs, by using any of your current skills to do extra work as a consultant, etc. It’s absurd to conclude – before you even try – that there is not point to getting a second job. Given your current income level, it could double or triple the amount you are able to put to debt payments each month.

    Second (and I know this will sound harsh to many), I have extensive professional experience with depression, and often the worst thing to do is to quit a job. Some people have serious clinical depression and this is necessary. For most people, quitting one’s job only makes the situation worse because it takes away something productive to do all day with your time and it throws the rest of your life into a tailspin (eg, your finances). And I have seen many, many people use mild depression as an excuse to quit work and act financially irresponsible.

  23. Erin says:

    One other point in favor of getting rid of the car and moving closer to her work: because of her MS, there is a strong likelihood that she will eventually be unable to drive. It would be easier and less stressful determine mass transit solutions now, while she’s able, than after her disability forces her to.

  24. Amy says:

    “Food can probably be dropped down too, but it takes a while to adjust to cooking at home and stocking the right groceries.”

    If her food costs are $200/month in New York, I assure you she’s already cooking at home. When I was dirt poor, I fed myself and my boyfriend for $300/month, but it was serious work to keep our diet healthful and varied, and find money for a bit of meat occasionally. (Except for chicken legs. We ate a LOT of chicken legs. Chicken breasts, however, were a rare indulgence.)

    “I think it’s pretty hilarious how recently people were furious that Trent suggested looking for cheaper housing in NYC and today everyone’s shocked that Maggie is throwing away $1100/mo on rent.”

    Trent seemed to think it wasn’t difficult to find an apartment to share for $800 a month, people here are suggesting that she’ll pay about that much herself. That’s a big difference. I also don’t think that anyone who is familiar with New York thinks that $1100 a month is a ridiculous or extravagant amount to pay for rent – it’s well within the bounds of normal for a twentysomething professional, and she is going to have to make significant tradeoffs in terms of smaller space or fewer amenities in her neighborhood in order to find something cheaper.

  25. Anna says:

    Maggie definitely needs a phone, but not a land line or an expensive cell phone plan. With TracFone you buy the cell phone (Kmart and similar places usually have basic phones on sale for $20 to $30) and then prepay a certain number of minutes, according to the configuration you choose. The phones are not the latest models with cameras and other bells & whistles, but they do provide basic portable communication, which is all Maggie needs in her situation. Unused minutes roll over to the next time period and are not lost. You do have to remember to renew the minutes before the expiration date, but that date is shown on the display. Disclaimer: I have no connection with TracFone except that I own one and think it is a great bargain.

    Off topic for this thread, but on topic for this subject: clueless Eleanor from the other post should be reading this thread and taking some of the advice to heart.

  26. michael says:

    Moving out of the apartment is a good idea but $1100 seems cheap. Could Maggie look at getting a cheaper place in Queens or Brooklyn while subletting for a year? I know of studios that go for $2000 in manhattan.

    Also, I don’t think it would make sense to move to a cheaper part of the country. 60k is much less money in NYC compared to west Virginia. Salaries should be much higher in New York then In less expensive parts of the country.

  27. Charlie says:


    Simplicity is calming and helpful. Find a friend or someone that you can trust to talk about all that you have goin on, a sounding board if you will. This can be very important to keep you on track.

    There is hope.

    Follow your heart.

  28. Rebekah says:

    As someone with some debilitating health problems, I (1) Agree with Alexandra that the cell phone may be vital. I don’t have MS but I’ve got other health problems, including clinical depression, and have needed my phone quickly. However, I wonder if a Pay-As-You-Go plan might work better for her? Maybe her doctors’ offices use email when asked; that would save her a LOT of minutes. (I’m saying this as someone who doesn’t use her employer’s phone for personal calls.) Many times, when I have something to say to my doctors, I’ll FAX or write it, so that Whatever It Is has a permanent place in my chart – and I’ve got a permanent record on my hard drive. I fill my prescriptions online. None of this is to save minutes, since I don’t use my phone very often, anyway, but for the permanent record – and it WOULD save minutes if I needed it to. (2) Agree with Amanda that Maggie shouldn’t move back in with family. Any pressure from that control freak dad may make things worse! (3) Agree with Sharon regarding the discounted Subway plan; if she’s approved; her per-rate ride is half. (I visit the City; I don’t live there, so I don’t know how much the monthly pas is. I would guess that that is half as well? My trips into New York are half, and rides via Amtrak are less than the senior rate) (4) Agree with Jane that Maggie needs to keep her job; not working may make her depression worse. Her depression is already exacerbated by the MS – don’t make it worse!!

    My own thoughts:
    I don’t know if she CAN take public transportation. (New York isn’t exactly Handicapped friendly.) If she cannot, she may NEED the car; if that’s the case, she may be able to write off part of the expense? She also may want to drive as long as she can, despite the expense, if it’s one of her remaining shreds of her former life.
    Is she itemizing her taxes? Every medical expense is a write-off. Prescriptions, COBRA, co-pays- write ’em off. Does she need special shoes? Get a prescription and write them off. And so on.
    At $1100/month, is it possible that she already HAS a room mate that isn’t mentioned in her letter? If she has a friend who is an accountant, she may be able to get help there. I pay an accountant, and it’s worth it; last year, I got back more than twenty times what I paid; I would have had to pay taxes if I hadn’t itemized, and I have such a high percentage of expenses that I can’t do the taxes myself.
    Getting another job may be physically impossible for her; I don’t know how severe her condition is. If she’s suffering from some of the more severe symptoms, including loss of cognitive function, she might not be able to get another job. That said, she might be able to do some work in another department, since she’s at a University, for extra money. (Is she allowed to take typing or editing from students? When I worked at a University, I was NOT – but I developed a reputation and have been called to do editing for people from other universities. I declare this income, but it’s a nice cushion.) She might also see if there are ongoing clinical trials that would make her more comfortable.

    I’d recommend someone else as executor of her money, if she can’t do it herself. She shouldn’t be afraid to use her own money. Paying off the high interest cards, now, or at least paying them down, will lower her depression considerably.

    For her condition: if it’s OK with her doctor (and it should be), she should see what kind of pool or gym facilities are available to employees. “Those patients who participated in an aerobic exercise program had better cardiovascular fitness, improved strength, better bladder and bowel function, less fatigue and depression, a more positive attitude, and increased participation in social activities. … Inactivity in people with or without MS can result in numerous risk factors associated with coronary heart disease. In addition, it can lead to weakness of muscles, decreased bone density with an increased risk of fracture, and shallow, inefficient breathing.” – from a University of Utah study of MS, published in 1996.

    I looked online for resources for people surviving and beating MS, in New York City. She may be able to get some assistance and guidance from http://msaa.com – they have a help line if she needs to talk (under Programs and Services, then left sidebar – Offering Lifelines) and can go to http://msaa.com/regional.html to see what the New Jersey regional office can do for her, as far as services.

    I hope that she can regain control of her own money and, then, her finances and her life. She’s overcome a huge obstacle by getting a great job in these trying times, and she’s going to have to work harder than her peers when she’s fighting with her body. She is down now, but Maggie sounds like she’s still got some fight left in her – and I wish her luck.

  29. shawn says:

    Bankruptcy is not necessary here, IMHO. As someone above mentioned she has no seizable assets so she’s at no risk from her creditors besides being hounded. She can negotiate herself, with out credit counseling, a settlement on her credit card bills. I would highly recommend she pick up Dave Ramsey’s The Total Money Makeover and perhaps even give Dave a call on his radio show.

  30. Liz says:

    @ Jane

    On the second job bit, I believe her! If she has MS, then no. There really isn’t an appropriate second job (assuming of course that her current is a 9-5)

    I can’t think of any second job I’ve had that wouldn’t kill her, literally. She has MS, she cannot afford to stand on her feet for 9 hours solid doing even menial labor. This cuts out retail and waitressing (food service period!), everything but really temp agencies. And as aformentioned, her job probably has her work 9-to-5. So before you just say, yes you CAN get a second job, why not say instead, oh, here’s an industry that lets you sit down, that you might not have thought of? ‘Cause I’m with her and can’t think of any.

  31. lori says:

    Bankruptcy laws do indeed vary from state to state. This is why so many high profile people flock to Florida when they file the Big B – Florida allows one to keep more assets than any other state.

  32. Sharon says:

    Poor Maggie,
    I wonder how she feels being bombarded by all this advice. Not just finance, but health wise as well.
    I will say that I think that the cafeteria plan might be worth looking into, because even I who am healthy can get into a cycle of I’m tired and don’t feel good/don’t want to cook decent food/don’t eat decent food so I don’t feel good. For someone who has MS, that can be a serious issue.
    I do think however that we are seeing her as far more disabled than she is. She has MS. It means that she might have no problems for years and then be unable to hold a job for a while and then be fine.
    But fatigue is a factor so maybe for her, a second job might not be so great unless it is something like house-sitting where the work is passive. Any professors on sabbatical? but otherwise, I think she is right, a second job may be a short term shot in the arm with long-range serious ramifications which just wouldn’t make it worth it.
    I think the “take a serious look at the IRAs vs the credit cards” has been done to death, and would be interested in seeing how that works out. I can imagine though with a long term illness to be accounted for she may feel reluctant to wipe them out.
    So Maggie, any reactions to everyone who has offered so much advice? And do we all remind you of your controlling father who wants to run your life?

  33. Some Woman says:

    Maggie, I would not recommend bankruptcy, mainly because of your ms. The sad fact is, if you doesn’t have adequate insurance your MS could lead to future, substantial medical costs (I know you’re aware of that, but many people wihtout MS may not be thinking about that) I think you should save the bankrupty option in case those medical bills skyrocket.

    As someone who has MS, I know that depression is common among MSers. Stress exacerbates (spelling!!) MS significantly. It seems to me that your number-one goal should be to reduce stress and maintain health. Fortunately, getting in a better place financially will help you be less stressed.

    You can also contact your local MS society; they might have some ideas or help available. Some MS meds are available at no cost to people who can’t afford them.

    You are in a rough spot, but it will get better. Really!

  34. Helen says:

    Amy is right about bankruptcy law. The Bankruptcy Code is a federal statute, not state law. In some cases, bankruptcy law defers to state law to some extent–such as, as Lori alluded to, the homestead exemption. But simply moving to another state and then filing bankruptcy will not carry any advantage, unless maybe you think the judges in a particular district are friendlier to debtors than elsewhere.

  35. Kim Bentz says:

    It seems as if one of the biggest problems this woman has is defeatest thinking. That is not to say that her situation isn’t dire, difficult, depressing, demoralizing and overwhelming, but I would recommend that she watch “Door to Door” and other similarly inspiring movies, and otherwise actively seek out stories of people who have overcome enormous obstacles.

    Maggie’s life seems unmanageable, but the fact that she reached out says that she is still trying. Above all, do not give up, Maggie. One of the things people with diabilities sometimes do is give in to their illness more than they have to. I have given in to mine at times, but I can assure you that the people I know who are most crippled by their depression, their physical illness of various kinds are those who spend too much time thinking about what they are missing and not enough about what they still have.

    Finances included. Seeking out things to be grateful for, rather than looking solely at all the difficulties may open up your mind to opportunities you would not otherwise see! While you wrestle your IRA from your father, don’t forget to thank him for taking care of that for you (even if it chokes you) some day you may be TRULY grateful.

    I wish you all the best as you look up and seek creative ways to cut your expenses, increase your income and pay down your debt.

  36. Kathy says:

    Maybe I am the only crazy person here, but as strange as it sounds, I would leave the retirement money with the father, for the time being. His being a control freak could actually be a plus in your favor, if you could stop to think of it that way. Hang on to what ya got, kid. At least he cares enough to be a control freak.

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