Dispair and My financial crisis!

Post Reply New Topic

I'm having very serious money problems, and I'm not sure what to do. It brushes on a more serious life issue for me... that I'm not sure if I'll ever be able to keep under wraps.

In between November and December of 2008 I got seriously over drawn at the bank. Due to some direct withdrawals that I forgot about, and some miscalculation on my part... I was over drawn by about $250. Unfortunately much of this was very small purchases like fast food and whatnot, which I thought I had in the bank. Even more unfortunately, my bank charged a 'convenience' fee every time you go over with the use of the check card. So the total that my bank was overdrawn was around $900.

When I went there to talk about it, they told me at the branch they could only take off 200 or so of the 'convenience' fees. I told them I would go to a larger branch and talk with the manager. When I went to the manager I found that they took off the 200 without my consent and they can't do anything and I must pay it off. So my fee is about 700.

I'm only working part time and barely make enough money to live now. So I have no means to pay this off right now, until I find more work.

This negative fee has now gone off to collections. And today I got a call from the collections guy. I was explaining my situation, and he was trying to setup a schedule to pay it... but until I get more employment I can only pay it off very slowly. He's trying to 'work' with me and said if I could scrounge up money from family and pay it off right now It could go for 550. I'm uncomfortable asking family for money, and I don't even know anyone who would have this kind of money to help me out right now... so I told him I would get back to him about this.

I asked what happens with this if I don't pay it off quickly. He started to rattle off all these horrible things... I wouldn't be able to open a checking account, bad credit, and it would come up in background check when I look for work. The last is very upsetting to me. I already have a hard enough time finding work, I don't need another thing. Especially one that points to my ignorance and stupidity of not being able to handle my personal finances.

When I attempted to explain the bank situation, he noticeably switched his tone of voice and was almost harassing me. He called me at the worst time, right before I was about to leave for work... and I was going to be late so I told him and said I would have to continue this at another time. He didn't sound like he believed me and said I was trying to jerk him around in other words. But I seriously had to get to work... I was even 5 minutes late as it is.

This isn't my only thing I have to pay off either. There are a couple of others that I'm unable to pay at this time. I didn't plan my finances properly. I recently graduated college last spring and have been trying to find work, and think of what I want to do with my career. I can't find anything that seems suitable to my skills.

I was living in an apartment independently for about 3 years because of part time work and financial aide. In October of 2007 my Mom passed away. I was able to survive over the summer and until last November on money from life insurance.

I've always had problems managing money. I don't plan for anything and forget to pay bills many times. I'm not extremely frivolous, but I don't save for the future. I get distracted by other things in my day to day life and forget to do the every day living type stuff. I've been cushioned in the bubble of going to college for my whole life and don't really know how to live a fiscally responsible life.

I am a smart person though, I did graduate college with a degree in math. I can understand various complex things. So accepting this is very very difficult. But I forget details, I don't understand the way normal adult things function. I'm extremely ignorant. I have difficultly talking to people and understanding the legal problems I can get into. I don't know what I'm going to do with my life...

It seems I am on the path to becoming a bum. I have to explain these problems to family to dig myself out of this hole. But their reaction would be to grow up, since my family regards me as intelligent and capable. But I'm not capable of managing my life. I don't have a mom or dad to turn to now. I have a large extended family(aunts and uncles) with their own problems. And again the response of many would be that I'm smart I should be able to handle these issues.

I don't see myself every managing this stuff properly, these issues will be with me forever. I see myself becoming an unemployed bum.

I need help, but everyone sees me as being capable. I could see myself managing properly If I had someone to help me along the way, showing me every detail of what I need to do to live an adult life... help me find gainful employment, help me organize and manage my life, help me get assistance for whatever psychological problems I have (whether this is caused by ADHD-Inattentive type, Asperger's Syndrome, Learning Disability, or something else... there is something 'wrong' in my brain that is making life difficult for me). But I don't know of any resources that are available to me to help me in such a way. My communication difficulties make it difficult to explain the problems that I am having. And no one seems to know anything.

Every where is a dead end.

I want to scream and cry and punch something on the inside... but on the outside I'm calm and my 'normal' level headed self. I feel like curling into a fetal position and shriveling up in despair. I don't want to commit suicide; I just want to do nothing forever. Because I just can't incorporate myself into this world, as much as I thought I could.

I need help.

OK, first off, you may want to get another checking account before this gets reported to the Chex system, otherwise this bank can close your account and they you will be high and dry as you will not be able to open another one for about 5 - 7 years. You are probably now with a big bank anyways (I can tell by the method in which things happened) and should try to find a smaller local bank if you can. More likely than not in this economy, the smaller bank is probably safer anyways.

Second, as for the collector, I would guess that he already violated a few provisions in the Fair Debt Collection Practices act. You should be getting a letter within 5 days telling you your rights. When you get the letter, simply offer your deal in writing and inform the collector that they are not to contact you in any means other than by U.S. Mail. Send it Certified Mail, signed return receipt. If one happens to call you again, inform them that if they get abusive, they will be meet with a dial tone and they should read their mail, but try to make the deal again. Whatever you do, do not give them access to any accounts and do not tell them you have AS. They will use that against you.

In the meantime, knowing you will need to make this payment, put aside the amount of money you were going to send them. Once you get to about $350 - $400, offer them that to settle. Most of the time, they will accept that.

As for your credit report, unless you want to work for a large company, most places do not even look at those. Besides, from your story, it looks like credit has not been much of a blessing so you might want to consider going on a cash basis anyways. The worse they could do is try to haul you to court for "writing bad checks" but I doubt they can even do that and if they do, then you can deal with the lawyer who will have more than 1 functioning brain cell.

Simply put, these collectors are punks and bullies and must be dealt with as such.

I got into similar trouble after a major depressive episode years ago. The bank doesn't want to deal with collections so they sell the debt at a discounted rate to these people. This is why they are willing to settle and why you shouldn't feel at all guilty about paying less than you owe. This is how they make money. They will try to collect as much as they can as fast as they can because the longer they hold the debt the less profitable it is. The first step is to make you feel guilty and pressure you into going to your family. They will not empathize with you at all it is their job to treat you as a set of numbers. It is futile trying to have a rational conversation with them. Just try to learn your rights and express your intention to pay when you are able to. I ended up going to consumer credit counseling because they can act as an intermediary. Whenever the collection agency called this is what I would tell them.
Make sure you use an actual non-profit agency if you do and don't get involved with some other scam.

It probably is a really good idea to go ahead and set up a new bank account while you can.
A checking account makes life a lot easier... and cheaper.

Regardless of what type of job you are looking for or whether you use credit at all you should monitor your credit reports. You can get them for free here as mandated by the government
https://www.annualcreditreport.com/cra/index.jsp
Even if you pay cash for everything someday you may want credit and if there are errors or someone has been using your identity it will be much easier to fix if caught early on.

It's a good idea to get one of the three reports every four months that way you can monitor throughout the year.
Your credit score is in many ways your "responsible adult score." Everything will be harder for you if there are negative items on your report. If you find something negative then either pay it, or get it fixed if it's an error. This can take some persistence but it's worth the effort.

Don't let the numbers overwhelm you. You made a simple mistake and the system is set up to take advantage of those mistakes. They do it because most people can pay and the banks make a fortune off of these ridiculous fees. You just have to change the momentum and start working your way out of the hole. The good news is that once it's in collections they can't charge you interest or late fees anymore.

office work really helps develop 'being organised' skills, you have to keep track of paperwork and that's what it all boils down to, use a diary or a calendar and make little notes in it. keep receipts etc. didn't your parents (sorry for your loss btw) leave you any money?

you sound like you need a mentor/case worker/rehab. is it worth applying for some help, if there is any?

I had a check I was trying to cash after my incident with the bank manager. I tried to open a checking account somewhere else and was denied. So I don't have another checking account... and can't get one.

I seem to remember the Chex system being cited. I've asked if once I payed this off if I'll be able to open a checking account again, and everyone has told me yes. But I don't know if I believe them... and this is just to give me 'incentive' to pay.

I've been working cash only for a while now and it seems better for me. But I still run into trouble by just looking into my wallet and seeing a lot of bills and thinking its okay to buy something slightly more expensive. But having all the cash around makes it easy for me to check how much money I have on hand.

I checked my credit report and have 4 potentially negative things. They are all over 2 years old though.

I picked up a cell phone a year ago, and they did a credit check and it went through no problem.

I don't have any credit debt, just student loans right now.

When I deal with people like this collections guy, I don't know what is real and what is him just harassing me. I told him a bunch of demographic information, but nothing relating to any personal accounts... just where I work and how much I make. Was this bad? They did send me a letter a week ago. I knew it was going to collections so I was just going to save up the money and send it in one chunk. Because I don't have a checking account, sending it in one sum would save in money order fees. How will he use knowing I have AS against me. I wouldn't say I have it, but I'm inclined to give up other personal information in the course of a conversation.

Postperson: I avoid looking for office work just because I am so disorganized. Most jobs say they are looking for someone who is a multi-tasker with strong communication skills and organization skills and making plans and such. I'm horribly honest, and can't say with a straight face that I have any of these skills. So that office work seems out of my reach.

I've tried to be more organized. I carry around a small notebook to keep track of things. I attempt to use google calender to keep track of important things. But it doesn't help completely. This stuff isn't on the top of my mind so I forget about it. I get mail and open it and regard it in my head, but it's not something I can take care of right when I open it... so I toss it on a pile and forget about it.

My mom was very young when she passed away just 46. She was just staring a career as a school teacher, so didn't amass anything to part with. Growing up we were fairly poor. I got some money from the life insurance.

I would like to find a mentor... but I have no clue about where to find one. As for a case worker /rehab.... I don't know where to go for that either. And also I get the picture that they wouldn't help me, since on the surface I appear more capable that others who would need those kind of services. But I'm pretty ignorant about them too...

" I get mail and open it and regard it in my head, but it's not something I can take care of right when I open it... so I toss it on a pile and forget about it."

well it's fairly basic, you have an 'in' tray and an 'out' tray, incoming bills and stuff that has to be attended to goes in the 'in' tray, bills that are paid, stuff that is over, goes in the 'out' tray.
more long term stuff can go in a 'pending' tray.

eventually you have to go thru the 'out' tray and decide what needs to be kept on file permamently (usually warranties, insurance papers, car papers etc).

the above is all basic office procedures, how about doing a course (i'm sure there is one), even if it doesn't lead to work.

OK, for the money issue, since you are not on cash only, can be dealt with using envelopes.

You make up each category for each envelope and fund it with each paycheck. For example, the first four things you should do (called the 4 walls) is Food, Utilities, Housing, Transportation to/from work. These are the basics. If you have extra money beyond the basics, they you set up envelopes for nice to haves/need to get done, such as paying off this bad check stuff. You put the money into the envelope and they it is not in your wallet. If the envelope empties out, then you have no more money to spend on that category

In any case, my first suggestion to you may be to set aside $500 somewhere that it cannot be touched BEFORE you pay the check charge. This will be called an emergency fund and should only be tapped in emergencies (such as bouncing checks). Once you get any other credit issue taken care of (and you should take care of all of them), then you need to build this up to 3 months of regular expenses.

As for debt collectors, it is real simply. The easiest way you can tell they are lying is if they are talking. You did give them some information that they will use against you (such as trying to call you at work and threaten to tell you boss, illegal if you tell them not to, but they do it anyways). If you do not think you can deal with them, then do not answer any of their calls. I would also suggest getting knowledgeable on what the FDCPA allows debt collectors to do and not do.

Finally, you may want to go to a cash basis for a while if you have issues like this. That will help teach you how to handle your money. Alex does not allow the posting of outside links so I cannot give you the name of a group of people who can help but you can type in "LLNOE" into Google and get the link yourself.

Demeus: What is a reasonable amount of money to keep for food? I'm trying about $40 a week... but I'm not sure if that can be maintained.

For Transportation, does that include car repairs/maintenance or just gas and car payment.(which I don't have...I buy my cars with cash)

Saving up 500 is more important than paying off this collector?

I plan on going cash only. The only thing is that I will often want to buy something online because it's cheaper. So I am trying to think of a way to manage that. I looked into prepaid credit cards, but those have fees associated with them so in the end it probably isn't worth it. I might have seen some amazon.com gift cards. If I can use those for buying used items through the amazon marketplace... that would be about all I would need.

I checked out LLNOE.

Postperson: How often do you go through the 'in' tray? And I'd personally put everything in the pending tray. But this sounds like a reasonable system...

I'll look into a office procedures course. None of this organization stuff pops out at me as, 'the thing to do'. My mental energy isn't focused enough on what is practical and finding systems that work. And whenever someone shows me 'the way' I tend to get nitpicky... about way the system has problems.

Actually for a while, right after my Mom passed away, my aunt was helping me deal with all the estate stuff... and with that she helped me organize and form an office area and stuff like that. It was a great help, and for a time I seemed really organized and on the ball for all this stuff. But I slowly fell into my old ways... mostly for being down on my self from not finding work. Not having gainful employment creates a downward spiral in me, that makes it hard to do the basic stuff that I need to find a job in the first place.

Thanks to all of you for responding.

how often do you go thru the 'in' tray? well if there's stuff in there it's gotta be dealt with.

When I deal with people like this collections guy, I don't know what is real and what is him just harassing me.
****************************************************************

I would not worry about what the collection guy says. probably 85% of what they say is a lie trying to get you to pay. Many of them work on commission. I would not even engage in a conversation with him. The longer you are on the phone with him the worse you will feel. I myself am very behind & find it best to make short statements "I have had a personal tragedy & I am doing my best, a small check is in the mail, thank you for called" and quickly hang up. That way I am not hostile, it looks like I am trying & ending with thank you for calling makes it almost impossible for them to be angry with me.

I believe as long as you are making regular payment, even tiny ones, they will be nicer to you, it looks like you really are trying your best.

1) If $40 is not cutting it, you may want to raise it to something that can be maintained. I do about $60/week and for the most part, that seems to work as a good average.

2) Good that you do not have a car payment. You want to put aside for gas and maintaince/repairs. I cannot say what that will be as it is different for each situation.

3) Yes, the $500 savings is the most important thing right now (I am assuming you make about $20,000/yr.). This will put some money between you and life. I bet if you had that savings before, you would not be in this situation right now. There are many times where full blown disasters became only a minor annoyance simply because I has some savings between myself and life (especially one case where otherwise, I would have bounced a check to the IRS).

Trust me, that collector will not go away whether you save the money for a rainy day or save the money for him first. I doubt they will sue you in the next 3 months either as the amount is very low.

BTW, if you do get a job where your income comes up substatially, I would suggest raising the emergency fund amount to $1000.

4) Right now, you need to clean up your mess before purchasing more stuff from Amazon.com. Once you get this bank stuff cleaned up and can have another bank account with a debit card, I would say to go ahead and buy stuff IF you have the money. If you have gift cards, then by all means, use them up.

Once you are done cleaning up all your debts (I assume you do not own a house), then turn around and beef up that small savings fund to a full emergency fund of 3 - 6 months of expenses. Once you do that, then all disasters will seem like a minor annoyance.

Thanks for the advice demeus. Sounds like a good plan, that I will put into practice.

As for buying stuff on amazon.com, that is for down the line. I was thinking about truly going cash only and how viable it would be for me. Even when I do get a checking account again, my plan is to only put money in it that I must pay with the checking account. Everything else will go into cash that I can easily keep track of.

There are sometimes things I want to purchase that are either impossible to find or much cheaper online... So I was trying to think of a system that would work for me that would allow me to purchase stuff online and go without any sort of credit card. Even when it's tied to a checking account... that plastic is killing me...

OK, this is where the debit card comes in. They are actually handy tools when used properly. What you would do there is determine if you have enough money to purchase the item (including shipping and any sales tax), deposit that into your checking account, then immediately make the purchase with the debit card. Other than that, leave the debit card at home and never put it in your wallet.