Ooof, I'm so sorry for your friend. I have a few friends that got laid off and it's hard to know what to do.

Well, if she has applied for unemployment, she will need to prove that she is looking for a job in order to recieve benefits. Hopefully, that will help her a little financially with being able to stay afloat.

I would tell her to contact her mortgage company and credit card companies, let them know what happened, and see if they will work out an adjusted payment plan with her. Trust me, the mortgage company would much rather keep her as a lender than go into foreclosure.

Some credit card companies even have a job loss protection option of where they will stop all payment requirements in the chance that you lose your job. Again, the banks will just about jump through hoops to get SOME money coming in than nothing at all.

She may have to take a job that pays less, or even a position she hasn't had to work or ever worked before. It's all about doing what you can to stay afloat, putting your pride aside, and knowing that it's temporary.

The job I do now pays very well and is with the government, but they have been slowly laying people off. In the past, I've waited on tables to make ends meet. If I couldn't find anything, I'd do that again if that's what it took.

I think people are afraid to take lower paying jobs because they are afraid of what that would look like on their resume, but number 1: who says you have to include that on your resume? And number 2: Considering the economy, I think any future employer would completely understand.

Boy, I'd sure like to know the answer to this, because I am in the exact same situation. One suggestion that was made to me was to rent my house for enough money to make the mortgage. Then theoretically I can hang on to it long enough to sell it withought loosing as much value. That doesn't solve every bill problem, but does take care of the mortgage problem--I know because I once rented my house. I rented it mostly furnished so didn't have to pay for storage. I kept my personal things in a locked room in the basement. But that doesn't solve all her money woes. But she is in a very big boat. I would really like to know what we are all going to do in the next year. Oh yes, continue to look for jobs and do what you can and take what you can get. But a low paying job (or 2 or three) isn't enough to live off of nowdays, and I am not talking about the high flying lifestyle. I am talking about the basics of room, transportation, health care, and food. She may end up having to just rent a room for herself, but will be lucky because a lot of folks will be renting out rooms to make ends meet. The car issue and health insurance issue become problematic too. Even the cost of special low income insurance programs that states offer are not any cheaper than things you can buy on the open market, and have long waiting lists. What your friend is going to have to do is become poor--someone with bad teeth, no health insurance, living in a rented room, wearing shabby clothes and working long hours. This has been the condition of most of the human race throughout history. It doesn't do these people any good to give them bootstrap pep talks, or say, "Oh you really must see a dentist about that toothache." Buy her dinner. Give her clothes. She won't use that as an excuse to become a lazy welfare bum. Try to distract her from her sorrows with love and occasional invites to your "heat is paid-for" world. If and when you yourself have something extra left over to share.

Sorry, I just reread that post and I realize it sounds very negative. What I was trying to get at though, is it is very likely that your friend will have to adapt and adjust to a new lifestyle. When I was young, I had nothing more than would fit in my car, drank and ate out of a dish set made of old microwave tins, jelly hars and cottage cheese containers, has furniture I picked up on the street on trash day, drove an old car that would periodically loose electric power, and my entertainment was my radio. I wasn't miserable, I had my health and friends. But now as I start to do such things, my friends and colleagues, now middle aged, look askance at such conditions for an older woman. They find it unfathomable. It's time we started to fathom it. I wouldn't feel so bad giving up my furniture, dishes and such, if my friends wouldn't keep saying such things as--Oh don't sell that! Surely there must be an alternative! It's time you got rid of those old shabby shoes, they look horrible! Why do you still have that big scratch on your car! etc.! There is no sugar coating the changes your friend may have to make, but accepting and supporting her as she does these difficult things will be a great gift to her.

As an example, in my case, my folks grew up in the Depression. They were poor but didn't know it. In many cases they had happy childhoods. They had the love of friends and family, which costs nothing. They shared resources with neighbors much more than we do now. They were poor materially but rich personally. That is going to be the challenge for your friend, to find those gifts in her life. It wasn't this way for everyone in the Depression, many people did not have the riches I'm talking about. My folks were lucky. Much of their survival was due to my blessed grandparents, who just dug in their heels and made a stand. They did what they had to do, they bore the hardship with stoicism. That became the ethos of the times.

Hi Linda,

Jo read your post & sent me over from the financial boards.

1st off, your friend is unfortunately living "on the financial edge" with only 3 months of reserves... and that alone could end up being her failure... but its too late to go back & do it right.

NOW she needs to simultaneously look at all the ways to reduce (or legitimately delay, by negotiated agreement) all of her expense & outflows. As Gardengrl suggested, contacting all of her creditors is the first step.

Once she DOES have new employment she'd be in a position to have a loan modification negotiated on her mortgage (better to have a professional service do it... the bank's servicing departments are confusing & brutal to the general public.) Its not unheard of for hardship borrowers to have their balances, payments, and/or rates dramatically reduced... but it takes a lot more then just a "pretty please" plea.

Debt repayment (as self-honorable as it is) is definitely secondary behind actual survival considerations... so, if she doesn't see employment options pretty much immediately it may make sense to hang onto her cash savings rather than send it to make payments. First sacrifice would be revolving debt payments, then installments, and lastly the mortgage.

She's in a tough situation... but she's going to have to be tougher herself than the challenges at hand. This is "emergency survival" time... not financial planning time... and there's no room for pride.

All possiblities have be kept on the table, and opportunity favors those in motion. Taking a waitressing job, or even a barrista job, isn't a "kiss of death" because its NOT the "end solution." Rather, its simply IMMEDIATE ACTION... and further options can always be taken once in action.

I send her (through you) luck & strenght!
Dave Donhoff
Leverage Planner

Linda,

Hope you don't mind my calling in for reinforcements. Dave is modest and won't tell you that he is a regular lifesaver for those who post on the Buying and Selling a home forum. He is a mortgage guy by trade, and always, and I mean always, has the time to help someone in need.
He is one of the good guys.
Jo

Linda, you've gotten some good advice and I don't think I can add to that.

Here in Michigan one of my secretary's husband just lost his job. He's only getting $80 less per week on unemployment than he was working and he doesn't have to drive 120 miles a day commuting, so they're OK for now.

I've been in a position in my life, not so long ago, when I had to have two jobs to make ends meet. I worked here at the office and kept books for a local radiator shop 3 nights a week. At various times I've kept my 8-5 job and still waited tables, tended bar and/or worked at a local gas station. One of my other clerical employees still has two jobs, her job here and one at a local convenience store.

So, after she applies for unemployment and after she cuts out every single luxury, like smoking or drinking wine or getting fake nails or whatever, she may very well have to get another job doing something she'd rather not do. Maybe two of them. Sigh.

It sucks.

Annie

Thank you, everyone. It's tough when it hits this close to home. You see, it's my sister that finds herself in this unexpected and unfortunate predicament.

When I talked to her last night, the first thing I told her was to call her mortgage company and see if they will work with her. I also told her she may just have to get a roommate. That's how I made my house payments all through the 80's after my divorce.

She has always done well for herself, and she is a very proud woman. It's going to be tough going, but the whole family is here to help in any way we can. I am just afraid....what happens when another of us and then another find ourselves in the same position? Thousands of jobs ost every single day. In my 54 years I have seen a lot of peaks and valleys, but nothing as bad as this.

Renting the house out might be a good idea, too. She could live with us for a while until things turn around. I am going to spend the day with her on Saturday. I will print out this thread and share your ideas with her. Right now it seems like the darkest hour, so I sure hope the dawn is right behind it.

Thanks again. I pray that this recession/depression turns around very soon.

Linda

I think I will jump off a bridge after reading this. It's what I am hearing everywhere. Although I feel like my job is in jeopardy, I own my house outright and have plenty of savings. I worry about losing benefits, though.

Linda, you are wonderful to offer your home to her for now. My son and I were just talking about this. It's such a good feeling to have family who would do anything for you and always have your back. The older generation helps the younger get started and the younger ones help the older ones as they age.

I too hope this dreadful recession turns around soon. It seems we are all suffering for the greed and stupidity of a few.

Linda, I wish I had something positive I could add. Michigan now has the distinction of having the the highest unemployment rate in the nation. We are also right up there with CA and FL with foreclosures.

I'm sorry that this has happened to your sister.

Nancy

Linda~
Sorry to hear about your sister! I've been hearing more and more stories like that here as well. It just makes you feel helpless to know that it can happen to anyone at any time. Take care!

Bri

Yeah, I sounded all doom and gloom. We will get through this. We will do what we have to do. The problem is, it will hurt, and I think part of the solution to that is to support each other, share a little more with each other, laugh as much as we can, and just get used to lives with no frills. They can still be very rich lives. I heard a guy from Mexico being interviewed on PBS once, don't know who he was, some Pulitzer prize wining author, and he talked about his life as a peasant in Mexico. He said it was a sad, hard life, but he wasn't lonely like he is now in the US. He said that we in the US are very well off but lonely. I know this isn't a practical, nuts and bolts solution for your sister, but as she adjusts and does these painful things, sharing time, food and a laugh with her will be so helpful!

And tell her not to worry, she WILL find a job soon with no problem! The only caveat is, like Annie says, it will more than likely be TWO or three part time ones, under somewhat cruddy working conditions (like for me it was/is commuting over two hours every day, and working 70+ hours a week, so virtually no time to cook or do anything around the house. At that point, your sister may be happy to rent it out, she won't be there much!) I am thinking about selling mine right now, just because it has been two years and no end in sight, so I just can't enjoy the house any more. With it being transferred into a liquid asset, I won't have the house and its emotional baggage tying me down. But people tell me not to sell because it is such a bad time. Since I didn't overextend to buy it, I can sell it and probably not loose any money, maybe make a little. IF I can sell it. My house meant/means the world to me but it is something I may have to let go of. The best thing to do for your sister is just be there and try to keep her ACTING/MOVING like Dave says. Just one step at a time! Get the resume done, get her name out there, pound the pavement every day, then go to the library and check out some good movies to watch and sit up with your sis and eat popcorn! Have her check out some job finding books at the library. There are several books with the theme "Find a Job in 30 days" etc. Libraries can get them through interloan if they don't have any of those exact titles. I looked up that phrase on Amazon and found quite a few. These aren't specific ideas for the house though. Dave gave you some good advice, I know several people who did the renting thing and had good experiences. There is a LOT on the Internet about renting your house. I found a lot of info on it and sample leases and other forms too. The important thing is to vet your tenants thoroughly. I was lucky, and my friends for the most part who have rented rooms in their homes or rented their homes out have been lucky too.

Linda, I sure can't offer better advice than you have gotten, especially from Dave who sounds like a very special guy. Bet the financial forums are going crazy!

It is so scary to see what is happening in the States. Things aren't quite so bad here but it's only a matter of time.

Where does this all go?

Linda~I wish I knew the answer. We are in the same position with my oldest brother. He moved in with us this past weekend after being out of work since the end of May.

My biggest problem has been getting him to swallow his pride and take a low paying job. In our case, we have been enablers for him not getting any job at all though. He was living in a larger city than us, so we thought he would have a better chance of finding a job there. We have paid his rent and bills for several months now. I finally had to cut him off and tell him he had to move in with us. He does have an interview tomorrow at least.

Keep a watch out for depression setting in with your sister.

Good Luck,
Linda

Linda, sorry to hear about your friend. Scary times for a lot people these days. BIL finds out this month if he gets cut from Best Buy. He rolled the dice and didn't take the buyout hoping his time there will save him. The buyout wasn't all that great. DS company is also looking at layoffs so they are more than worried. She is at Blue Cross. I'm more than nervous as our business is taking a major hit too.

David

Well, I am going to spend the day with her today. I talked to her yesterday and she told me she met with a financial adviser and he told her to let the house go.

I am having a hard time dealing with this guy's advice. She's been unemployed for four days and already he's telling her to give up? She said her unemployment will cover her house payment, but that will leave her with nothing to live on. I suggested a roommate, but she feels that the $5-600 per month she would get from that would only cover her utilities and bills and she would still have nothing for food and such.

I doubt she has even called her mortgage company or any of her creditors. I am really disappointed that she is taking on the role of "victim", especially since she is only days into her situation.

Unfortunately this girl has never had to do without, always buys high end, never had to shop at a thrift store, etc. She's never suffered a hardship like this and now that it's happening, she's willing to walk away and let someone else bear her burden.

Maybe it's me, but if it were me I'd do just about anything before giving up all I have worked for all my life.

I can see if she had already tried everything and this was her only option. But walking away and letting the bank (read: taxpayers) bear her financial burden should be a last resort in my opinion.

Am I being too critical?

Linda

Linda, I tend to agree with you. Yes, times are tough and jobs are scarce, and the easy thing to do is throw your hands up in the air and give up. Who amongst hasn't wanted to pull the covers over our head and not get out of bed occastionally? Crikey, like you said...it's only been four days. Personally I would keep a roof over my head as a #1 priority. Credit cards bills could be put on hold.

I would network and call everyone I know and ask if they know anyone hiring and take ANYTHING. You can still collect unemployment and make a certain amount on a part-time job without jeapordizing the benefits. What about a tax return? Is she getting a refund? Also, you said she buys high end stuff. How about E-bay? I went through closets a couple of years ago and made a couple thousand bucks! Get creative. Giving up after four days is just plain crazy IMHO.

Duane

Linda~ I think your sister and my brother are related. I have had the same frustrations with my brother. You are not being too critical. I wish I had some insight for you, but am lacking it in my own household with my brother. Maybe we need to form a support group for siblings that have siblings out of work.LOL. Good Luck,
Linda

Well, it's good to know I am not the only one that thinks she is throwing in the towel way too early.

We spent a good part of yesterday together and the subject was not brought up. I think she knows I disagree with what her "financial advisor" told her.

Another thought crossed my mind. If she decides to just walk away from her financial obligations, I feel she really should not be accepting unemployment checks-at least in the amount she is expecting. Those funds are meant to help keep you on your feet during a crisis, not to pad your savings account. Collecting unemployment equal to ones mortgage payment and not making that (or any) payment just seems wrong to me.

This whole business is just mind boggling.

Linda

Maybe the financial adviser meant "let the house go" in the sense of "sell it." What he supposedly told her is so crazy, you have to wonder if she heard it as he intended it.
Your sister is panicking, I think. She needs to calm down and not make a hasty decision. Without knowing her likelihood of finding another job quickly, or knowing her resources compared to her mortgage payment, it's impossible to say for sure... but, probably she should put her house up for sale. She needs to think this through rationally.

Here's a way to make her see that just not making any mortgage payments is not only irresponsible, it's dumb:
ask her to imagine that she is being considered for a good job. They have lots of good applicants to choose from. They run credit checks on the best of them. Her credit report shows that she stopped paying her mortgage the minute she was laid off. Who are they going to hire? Someone else!

Good point, CC! I never even thought of the credit report/job thing!

Linda

I know jobs are not plentiful, but they are out there still for qualified people. I think people listen to the media too much and think things are hopeless. I don't believe that is true. Things are not as good as they have been in the past, but I think there are still jobs available and even in tough times qualified people are needed. This is not the great depression. We are going to be okay. I truly believe that. Get out there, network, and find something. If your current profession is not happening, reinvent yourself. I tend to be depressed at times, but I know if you believe in a God, he will help you. Have faith and believe and if you have to go in a different direction, so be it. There are many ways to make money. Don't pigeon-hole yourself. Look at hobbies that you enjoy and figure out a way to turn that into a business. And again, look at e=bay and sell some stuff you don't need. Also Amazon. I sold several hundred dollars worth of books I didn't need a few years back. There are ways to stay afloat without giving up the house. And if that is necessary so be it. But consider other options is all I want to say. I will now shut up on this topic.

Duane

I don't mean to be so negative but if all these people are hearing stories about what's happening to your sister, how will she be able to count on rent payments if she rents out her house? If she lost her job and can't afford her mortgage, how many other poeple right now will be able to. A lot of them are in the same situation.

What I've been seeing a lot of here (and I know a few people who have been doing this for some time) is renting out bedrooms to university students.

One woman I know rents out 4 bedrooms in her basement to female university students in the medical field. They have a kitchenette and a schedule that must be followed. No boys, laundry on certain days and time, etc. She charges each student $350 a month. That's $1,400 a month.

Another couple I know, both teachers, rent out rooms too and that's what is paying their mortgage!

She can do the same and not have to move out or take the chance of renting it to people who will damage the place.

Just a thought! Good luck to your sister.

Khandi, I agree with you. I told her to look for a roommate (or two). She has two extra small bedrooms but only one bath in the house. But if she took a few hundred of her severance and recruited my husband, her nephew (my son) and a few friends, we sould put a simple bathrrom in her basement for pretty cheap.

I know there are ways to make it during times like these. Because I had to make it through tough times. I remember taking a calculator to the grocery store in the 80's (when I had two roommates, by the way...) because I had $30 to spend on groceries! Ya know what? I made some really decent meals for me and my kids on that $30 food budget!

She hasn't had that kind of challenge until now. And she obviously is not as resourceful or motivated as she could be. Someone told her that foreclosure was the easy way out and it appears that she agrees. Personally I would be too proud to ever take that way out. I'd go down with one helluva fight.

I agree woth you, too Duane, there are jobs out there. One just has to be determined that this thing isn't going to beat them and take what they must until things turn around. Like so many of you have said earlier in this thread, swallow your pride, take any job you can get, it is a quick fix until something better comes along.

Geez, I hope she doesn't do the wrong thing.....

Linda

Linda - Props to you for trying to help her with good advice. It must be hard to watch her go through this.

It make angry that some people just want to take the easy way out through foreclosure or bankruptcy. Those vehicles exist for people who truly need them, and I don't doubt there are people who do.

But, far too many seems to fall into the category of a friend of mine. She and her husband are in financial dire straights simply because they felt entitled to live beyond their means for years. It's finally caught up with them but they won't bear the brunt of the fallout, we taxpayers will. And the sad thing is, she's passed the same mentality on to her two daughters, who have also failed financially. I still remember her reaction when I suggested her daughter give her up weekly $25 manicures!

There are jobs out there - I see lots on Craig's List and online job-search engines. A few years ago, I anticipated the same thing happening to me - that's why I'm back in school at 47. And sure enough, I hear I'm about to be laid off in the near future.

And I agree about eBay. Half.com is also a great way to sell books!

Can she rent the whole house out for what her mortgage is or close? If so, she could do that and move in with you.

Then she should go get ANY job or jobs for now, while she combs the ads and networks to find a better job.

In the early 90s here in Southern Cal alone we lost half a million jobs when the aerospace industry collapsed.

Does she have any sales ability? Those jobs are always available for talented people. If there are no jobs in her field, she may need to do what goldgirl is doing and go back to school, with an eye on a field that's growing.

Good luck to her.

She might also need to consider relocation to expand her search horizon.

The agencies are being very accommodating for short sales. She should contact her servicer now & start the process. Waiting until she has 2 weeks of cash left is not a wise move, IMO. Also, it's better to contact the servicer before one is delinquent rather than after default is the only option. The servicer might also be able to offer other options than short sale (extended term to lower payments, principal reduction, interest reduction, etc.). She won't know what those options are if she doesn't phone.

Best of luck!

/tricia

Linda,
I was notified you were still having troubles... and I wish I could help further, but as you are realizing, you can only nudge family so far.

ONE THING I would like to suggest, however, in regards to unemployment benefits;

REALIZE, unemployment benefits are an INSURANCE benefit that you actually have to EARN by PAYING INTO the system. (I know... being self-employed, even as a "boss" creating jobs for others... if I hit a hard spot, I get zippo in support... I haven't paid into unemployment insurance as an employee.)

Its NOT a welfare handout... so regardless HOW defeatist, or lazy, or victim-ish you may secretly/quietly feel about your sister... she's earned 100% of the unemployment insurance payout benefits she can collect (and they are small, and oh, so short anyway...)

Luck to you, her, and your whole family!
Dave Donhoff
Leverage Planner

Thanks Dave. I am beginning to believe that the younger the person is, the more they feel "entitled" and/or like the world "owes them" when things aren't quite peachy. Not all young people, mind you, but many.

My sister is 12 years younger than I am, and as I said before has not had to go without nor suffer any kind of hardship until now. It seems like many people a generation or more behind me have no problem walking away from their obligations, where those of us that are a bit older take those responsibilities a bit more seriously, no matter how tough the going gets.

My dad would be turning in his grave if he knew how some of his children viewed "responsibility". He was a very strong believer in making your own way, and I admired him greatly for raising a family of 5 kids on a very limited budget. But we all had food and shelter and were happy. He died when my sister was about 14 so she missed out on many of the life lessons that I was fortunate to learn from him.

PS....I was always under the impression that unemployment is paid by the employer not the employee.

Linda

Linda,

Unemployment compensation programs are administered by the states and funded by payroll taxes that employers pay based on the number of employees (plus other factors such as the number of claims).

Each successful unemployment claim raises the employer's costs into the insurance fund. The fees (taxes?) that an employer pays typically rise during & after a recession to replenish the fund.

I believe what Dave is referring to is that he's not counting himself as an employee & paying into the Unemployment Fund so he'd have no benefits in the event his business fails. (hopefully, that won't happen!)

Your sister though IS entitled to those benefits.

The Social Security Act of 1935 created the Federal-State Unemployment Compensation Program. The program has two main objectives:

1.) To provide temporary and partial wage replacement to involuntarily unemployed workers who were recently employed; and

2.) To help stabilize the economy during recessions. The U.S. Department of Labor oversees the system, but each State administers its own program.

The program covers about 97% of all wage & salary workers.

Your sister is as entitled to Unemployment Insurance as she is to her Social Security benefits. Whether it's "welfare", or not, is another discussion. :))

/tricia