Financial terror

[figmo]

My checking account has a negative balance.

I almost have a deliverable for karisu_sama and her husband, but Virtual PC keeps saying it's "Out of Memory" when I try to install a critical piece of software.

Even when the radio station pays me tomorrow my checking account will still have a negative balance.

I have money in Paypal I need to get to Consonance, but I can't move it because it'd get sucked into the vortex of my checking account if I did so.

I can't collect unemployment because I "earned" money even though I'm not collecting a red cent of it.

I don't have enough money left in my E*Trade account to pay my mortgage and my bills.

I don't know what to do.

Comments

[drewkitty.livejournal.com]

Ruthlessly triage your financial situation.

Pay secured debts, i.e. the mortgage. FIRST. Pay service bills you can't survive without (water, power, phone) but pare them back to minimum levels. Cancel any services you can survive without (i.e. cell phone . . . get a pager). Then buy food only in bulk, set a grocery budget and stick to it. I recommend nonperishable foods from Costco. Spend only enough on gas to get to and from work.

Call unsecured creditors (credit cards) and tell them you're working, haven't gotten paid and are now broke. Ask them if you can send them $20 or even $5 to show good faith, and tell them you'll keep them informed. But don't pay anything above bare minimum, and if you must short someone, short the unsecured debtors . . . it's not like they're not used to it. It takes 2-4 months to get from "deadbeat" to "lawsuit" for unsecured, and they won't even go that far if you're still communicating with them. Be sure to mention that your SO has a serious illness. If you are honest with them but still have a good enough sob story, they will work with you.

CANCEL DIRECT DEPOSIT. As you have discovered, it is very convenient until things get ugly. An alternative is to split your direct deposit into two accounts with different banks. Given the radio station situation you may not want to ask them for checks . . . depends on whether you are hoping to go "back" or not. Asking for checks can send a message you may not want to send.

Think of cash as a scarce resource and manage it accordingly. Don't freak out too much. Even if you totally IGNORE the mortgage it takes 2-3 months for the bank's threats to go towards actual legal action. But pay the mortgage first because it's most difficult to "recover" if things go bad. If you have a roof over your head and a way to get to work, the other bills are mailbox stuffer.

[chatworthy.livejournal.com]

What she said, in spades.

In spring 2001 I was fired from my last job - which I desperately wanted to quit this job but couldn't (ugly story there). I was denied unemployment due to the circumstances of said firing. I didn't get my current position until July; I had very little saved up. I got a temp job doing secretarial work - not my thing so it lasted about a month. I focused on paying the mortgage and utilities, buying groceries and keeping the truck running, which meant I bought cheap gas and deferred oil changes. (which I am usually religious about doing every 3-5000 miles). The truck was long since paid for, so no problems there.

Kept the house, no problems; utilities stayed on (including Phoenix spring/summer electric bills - ow!), and I still can use one of the credit cards - the two I can no longer use I was -already- in trouble with before I got fired (all those Westercon bids). I expect only minor financing problems this coming fall when I go to buy new wheels.

Sending good thoughts your way.

[figmo.livejournal.com]

I'm on the financial paring down, but I disagree with some of your approaches for reasons I'll explain:

Pay secured debts, i.e. the mortgage. FIRST. Pay service bills you can't survive without (water, power, phone) but pare them back to minimum levels. Cancel any services you can survive without (i.e. cell phone . . . get a pager). Then buy food only in bulk, set a grocery budget and stick to it. I recommend nonperishable foods from Costco. Spend only enough on gas to get to and from work.

I am not getting rid of the cell phone. I have a plan where Warren and I can call each other for free. It is way cheaper than calling his house from my house. It's also a matter of safety. I can't call 911 on a pager.

Besides, I already cut my cellular phone bill by hundreds of dollars a month by switching to digital.

I already buy what I can in bulk. If I rarely use an item, buying it in bulk is silly.

Mom has already offered to pay next month's mortgage, so I've got another month in which to scramble. This may be enough.

Call unsecured creditors (credit cards) and tell them you're working, haven't gotten paid and are now broke. Ask them if you can send them $20 or even $5 to show good faith, and tell them you'll keep them informed.

I only have one credit card, and they know my situation.

CANCEL DIRECT DEPOSIT.

Why? The only thing that's depositing right now is the radio station, and it's always been reliable. What's not paying me is an agency from which I was to receive a check yesterday or, at the latest, today.

As for gas, I keep my trips down, stack them, and walk when I can. Since I mostly telecommute, I can go over a week without having to fill the tank. Most of what's in my wallet, though, is for gasoline Just In Case, as they say.

[drewkitty.livejournal.com]

When a bank account goes negative, especially certain banks (Wells Snargo and WaMoops in particular), they charge a Level II Overdraft Fee as much as $5 / day. This can also happen due to automatic deductions or due to a claimed "overpayment" by an employer. Or (worst case) due to financial miscalculations on your part. Writing a check for which you have insufficient funds is technically a felony. EVEN IF you had no intent to do so. This can add on various painful check fees of $10 to $30 or more, repeatedly.

You can get trapped in an endless void where you are negative balance, get a direct deposit that would have cleared the original debt -- but not the surcharges -- and are still negative. Rinse and repeat until you lose several hundred dollars to the bank, they close the account and report you to ChexSystems (losing the ability to get an account elsewhere!) and adding insult to injury, refuse your direct deposit and force your employer to process the next paycheck as a manual refusal which can take a while.

If you actually have a check in hand, you can get it cashed a number of ways without losing the cash to a checking account in crisis. There may be other bills (such as mortgage) which need paying first. You also have leverage to get the bank manager to waive the fees (which they can do) in order to get you to bring your account back up to current.

You're not in this particular bind yet, it appears, but Direct Deposit is one of the first things I suggest that people dispose of when they get into financial hot waters