Desperate for advice

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I need some advice. My 23 year old son just lost his job and moved home. Turns out he has about $15,000 in credit card debt, hasn't made a payment in months, is overdrawn at the bank, and has a total of $2 cash. He is a college dropout and has gone from one minimum wage job to another and is probably not eligible for unemployment (fired from pizza delivery following an at fault MVA). Current job prospects where we live are limited.

He also has student loans of $10,000 and a car loan of $4,000 and I am making those payments as I co-signed the loans.

I hope this is his bottom and he is now asking for advice. What can he do about the credit cards? Bankruptcy, debt settlement, anything? I did have him call a credit counselor but they seemed more interested in getting money for themselves rather than find a soluction. I am sorry but I am just overwhelmed.

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My advice is to change the subject to be more descriptive. "Desperate for advice" is too vague or useless.

zubba (Dec. 19, 2012 @ 11:42p) |

what summer work did you do that paid that much?

solarUS (Dec. 20, 2012 @ 12:40p) |

wait, are you suggesting that old cliché is actually true?!

elist (Dec. 20, 2012 @ 1:48p) |

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cwtrooper said:   and is probably not eligible for unemploymentApply at the website and get an answer

23 is not your problem anymore.


He is judgment proof , he has no job and they can't get a penny from his bank account

The best way to deal with this is to settle the debts for 10-15 cents on the dollar. Credit boards will guide you though how to negotiate . You have to do it yourself , not using those scam debt settlement or counseling companies.

Of course he will need $1500-2500 to pay the settlements but that's about the same cost as filing bk. he will either need to tap the bank of mom and dad or earn some money to be able to pay a settlement

BK, isn't worthwhile as he has nothing for creditors to get at the moment (no money and no job to garnish). I'd sell his car and pay off the car loan. Looks like he'll need to take the bus for a while until he gets a job and then deal with the creditors.

He should also be expected to do some house chores to help pay for food and shelter.

Why not try and defer the student loans for job loss?

if it already went to collection deal with it later to remove, even you pay the report will stay on his credit record for number of years and its big negative, creditboards.com has info about how to remove it
as for bank account don't let it close it, if it does it will report to chexsystem and he can't open anyother bank account unless its taken care of

as for work can't he get a job at big retail store for holiday season?

Why can't he keep a minimum wage job? What led him to be fired from his other jobs? As a family you need to sit down and understand some of the root causes. Being a college drop-out in itself is not the end of the world. You might bail him out this time paying 2-3k like SiS suggests, but what's the plan after that?

Get him back in the workforce ASAP; there's gotta be a grocery store or gas station where you live. Being out of jobs now will only add to his misery and lethargy.

Please remember that Student loans are not dischargeable in bankruptcy. They are there until they are paid, even if he files bankruptcy. This also means they have no reason to deal with you.

My advice is that you should pay the loans you cosigned, but don't give your son another penny otherwise. his job prospects are not "limited", he has no degree, no credit, and a poor work record, he needs to get a job at mcdonalds and pay his bills just like everyone else. You should decide how long you want him to live with you, and inform him that he needs to have his own place by that time.

ZenNUTS said:   23 is not your problem anymore.
I disagree and might be in the minority. This is still his son and the amounts involved are not unmanageable. A bit of guidance and good decision-making now will save many people a lot of financial and emotional headache later on.

Lucky for you he is not a law school grad... or else all those tallies would be about 10x higher right now and he'd still probably not be qualified to deliver pizzas.

Don't give him any money. (except the ones you co-signed)
Make him get a job to pay the rest.
Provide food and shelter for a while, and as long as he improves, rent is free, otherwise start charging him.

I agree with what others have said, and would add that if you choose to pay his vehicle costs, you might consider limiting the places you let him drive that vehicle to and from jobs or job interviews only. You don't want him driving around to hang out with his buddies, on your insurance, using your gas, while living at your home rent and job free.

Also, you said there are few prospects near you, but pretty much everywhere I've ever lived has a continual need for newspaper delivery drivers. It's certainly no more of a career position or any more glamorous than pizza delivery, but it's an honest buck and will force him to get in the habit of getting up (very) early, every day. Plus, it leaves the rest of the day open to work another job or go on interviews. Good luck!

Be all that you can be...

I agree with an earlier poster that you need to try and assess cause. Specifically, does he feel like he's too good for the jobs from which he's been fired, or not good enough for them?

Immediate steps:
1. Get his free annual credit report and see what it says.
2. Get an estimate of what the car is worth. If it's worth more than the loan, sell it.

raiser14 said:   Be all that you can be...Aim High.

Have you found out whether you've been promoted to grandparent? There may be more to uncover.

raiser14 said:   Be all that you can be...

Pretty much that I'd say. Give him a time table to get and keep a job or tell him he's going to have to be homeless or join the military.

I'd definitely sell the car to pay off as much of the loan as possible. Plenty of people in this world get by with no car. It's not a luxury someone that cannot keep a minimum wage job in America deserves.

Also if you catch him stealing from you make sure to call the police and press charges. You will not be doing him any favors if you let him off the hook for stealing cash out of your wallet so he can go out with his friends - because he's just going to end up stealing more in the future from someone that isn't going to let him off the hook. I'd say there is a chance you are going to be faced with the reality of that situation if he doesn't manage to get a job.

Being very harsh is the only way your son is going to start connecting his actions to the consequences they have in life. You cannot be afraid of being the bad guy and having your son "hate" you. It's something most parents have to go through and it's better to get it over as a teenager but better late than living at your house until you die.

UPS is hiring for the holidays... DELIVER ME MY PACKAGES!!!!!!!!!!!!!!!

powellm said:   raiser14 said:   Be all that you can be...
Also if you catch him stealing from you make sure to call the police and press charges. You will not be doing him any favors if you let him off the hook for stealing cash out of your wallet so he can go out with his friends - because he's just going to end up stealing more in the future from someone that isn't going to let him off the hook. I'd say there is a chance you are going to be faced with the reality of that situation if he doesn't manage to get a job.


Where did you get this stealing thing from?

As for the military thing some seem to be suggestion what makes people think the military would want him? With the various wars winding down from what I heard the military is getting more selective. They probably don't really want someone who can't keep a minimum wage job either.

mojoshtudd said:   ZenNUTS said:   23 is not your problem anymore.
I disagree and might be in the minority. This is still his son and the amounts involved are not unmanageable. A bit of guidance and good decision-making now will save many people a lot of financial and emotional headache later on.


If only it were that easy. The problem with "a bit of guidance" is that it's so rarely heeded. Anyway, giving him advice is just fine, but giving him money will only enable him to continue doing what he's doing.

powellm said:   


Being very harsh is the only way your son is going to start connecting his actions to the consequences they have in life. You cannot be afraid of being the bad guy and having your son "hate" you. It's something most parents have to go through and it's better to get it over as a teenager but better late than living at your house until you die.

Don't forget there are many cultures here at fwf and in some of those it is customary for the children to remsin at home until marriage , and/ or to take care of their elderly parents rather than ship them off to a nursing home

It makes very little sense for a parent to make their children hate them, then expect the same child to care for them when they are elderly and infirm.

Attorney here - I do credit card/debt defense here in Texas (and I also represent companies in collecting debts, suits on sworn accounts, etc). Not sure what state you are located in.

Before my clients see me, many have tried the credit counseling/debt consolidation companies. Those companies really do nothing that you (your son) couldn't do on your own.

As someone mentioned, your son is likely "judgment proof", however, even though he is judgment proof, judgments do show up on the credit file and it is easy for me to do a writ of garnishment and take the money out of any bank accounts your son may have in the future. Judgments usually do not expire and your son is only 23. It will be hard to live through life without a bank account.

That said, the best bet is for your son to try to settle with the creditors. I don't know how past due he is on his bills, but all credit card companies will not negotiate until you are in default for six months. Most companies prefer a lump sum now versus payments for a year. Also, make sure your son gets whatever agreement he has in writing.

Oh, and tell your son not to register to vote, that's how the creditors find you.

At a minimum, make him work at home for room, board, and car,and Only if he follows through and delivers weekly!

shihkang said:   Attorney here - I do credit card/debt defense here in Texas (and I also represent companies in collecting debts, suits on sworn accounts, etc). Not sure what state you are located in.

Before my clients see me, many have tried the credit counseling/debt consolidation companies. Those companies really do nothing that you (your son) couldn't do on your own.

As someone mentioned, your son is likely "judgment proof", however, even though he is judgment proof, judgments do show up on the credit file and it is easy for me to do a writ of garnishment and take the money out of any bank accounts your son may have in the future. Judgments usually do not expire and your son is only 23. It will be hard to live through life without a bank account.

That said, the best bet is for your son to try to settle with the creditors. I don't know how past due he is on his bills, but all credit card companies will not negotiate until you are in default for six months. Most companies prefer a lump sum now versus payments for a year. Also, make sure your son gets whatever agreement he has in writing.

Oh, and tell your son not to register to vote, that's how the creditors find you.

Attorney here too.
It is not correct that c.c companies will not negotiate a settlement until after six months default . Ive negotiated settlements with discover chase bofa usbank bbva and others in the 3-6 month late period. In fact six months is the charge off point , so you want to make sure to start negotiations before The six month mark , unless you are hoping to settle for less with the collection companies vs in house with the creditor .

Chase usbank and Bofa will do a three or four payment. Settlement rather than lump sum

Pay on the student loan since you co-signed and it will haunt both of you forever, along with the car. He'll need it to get work. Ignore all the other credit cards. The banks will charge them off and it is their fault for giving someone with such little income and so young that much credit.

Tent in backyard. Case of ramen. Hose for bathing.

there is still time with this young man --- but under no circumstance do you do any enabling here --- or you will have him on your couch at 43

I mostly agree with SIS. Only thing is many creditors wont settle for a good amount. I would have him ignore the credit card companies. If any offer a good amount then take it. Credit boards can show him the rest.

Make him pay the student loans and car loan (Get a job deadbeat.) IF he doesn't have a job make him do 5-10 applications / interviews every day until he gets a job. If he doesn't get one or loses it, kick him out.

Everybody is so callus, esp toward your family. What and who were you at 23? (Ill add: of your own making, without help!)
OP, Just make sure he learns not to live beyond means. That is his only real fault.

germanpope said:   there is still time with this young man --- but under no circumstance do you do any enabling here --- or you will have him on your couch at 43

This is so important. Don't give him the idea that you will bail him out. You will help him help himself. And open your eyes and mind to the unfortunate chance that he might be spending money on illegal or legal substance abuse.

This is stuff is not easy. Get advice from others besides Fat Wallet.

minimum wage means kinda sucks tho. JaxFL said:   Everybody is so callus, esp toward your family. What and who were you at 23? (Ill add: of your own making, without help!)
OP, Just make sure he learns not to live beyond means. That is his only real fault.

JaxFL said:   Everybody is so callus, esp toward your family. What and who were you at 23? (Ill add: of your own making, without help!)
OP, Just make sure he learns not to live beyond means. That is his only real fault.


At 16-18, I was working at Barnes & Noble as a cashier in the music section.
At 18-22, I got health insurance, car insurance, and a family plan cell phone from my parents. I had a full scholarship to school that covered living expenses, but I got some help on my rent in the summers since I was doing full-time professional (unpaid) internships.
At 22-23, I had a full-time job. I didn't make much, but it paid the bills, and I had my own apartment. The only thing I got from my parents was getting to stay on their health insurance.
At 23-26, I went to grad school. All the loans are in my own name, and I paid all my own bills. My parents helped out with my wedding, which was kind of them.
At 26, I gave my parents back the car I'd gotten in high school from them so they could use it for my little brother (who is still in college, and using it to drive drunk college kids around on the weekend for cash). Before my job started, my parents gave me a loan to purchase a new (used) car. I paid them monthly payments at a market interest rate, and then paid everything off within a year. I'd rather owe anyone else money than my parents.

You don't have to cut your kids off completely at 18, but they need to be progressively becoming financially independent, and they need to be interpreting any help from their parents as unexpected generosity, not a parental duty. I know my parents would always be there for me to help me out financially as long as they are able. But what you need is to get your kid to the maturity level where they have enough respect for either you or themselves that before they'd call on you for help, they'd have a reason a whole hell of a lot better than laziness, overspending, and inability to hold down a minimum wage job. Like, I'd mayyyybe move back in with my parents or ask them for money if I was literally dying.

I'm a 27-year-old guy, a few years out of school.

If I were you, I'd give your son a very basic safety net - essentially a couch to sleep on, but nothing more.

He's got to dig himself out of this on his own. He'll be better off if he does.

-mike

JaxFL said:   Everybody is so callus, esp toward your family. What and who were you at 23? (Ill add: of your own making, without help!)
OP, Just make sure he learns not to live beyond means. That is his only real fault.
Let's see...I was running my own team as a NCO during Desert Storm, maintaining Avionics systems of B-52s and KC-135s while deployed to Saudi Arabia. I was on my 3rd assignment post tech-school (George AFB as a Weasel Keeper, Anderson AFB as a member of the only nuclear bomber unit outside CONUS, and at the time, at Dyess working KC-135s...to then PCS to Korea to work on U-2s when I got back from Gulf War I).

Being 23 is no excuse to have issues. People of all ages have issues. It is what you do to handle them which is how you should judge them.

My guess is there is something else going on (drugs, alcohol, or mental illness perhaps as a starting point to be looked at) in this young man. Of course, he could simply be a loser, but I wouldn't start there.

As for joining the military...a lot harder these days with the draw down.

Mickey D's is always hiring.

soundtechie said:   Please remember that Student loans are not dischargeable in bankruptcy. They are there until they are paid, even if he files bankruptcy.

I had always heard this as well but I was reading an article in the WSJyesterday that was focused around some students successfully getting out of student loans through bankruptcy. The bar was relatively high but it is possible.

Crazytree said:   Lucky for you he is not a law school grad... or else all those tallies would be about 10x higher right now and he'd still probably not be qualified to deliver pizzas.

90% of them that do graduate aren't qualified to deliver pizza either

They're too busy chasing ambulances.

JaxFL said:   Everybody is so callus, esp toward your family. What and who were you at 23? (Ill add: of your own making, without help!)
OP, Just make sure he learns not to live beyond means. That is his only real fault.

I was in the second year of my doctoral program and was a research assistant making stipend plus tuition and health insurance, counting cars at intersections for engineering firms 2-3 evenings a month for an extra $50/night, and working in our family business 4-5 weeks a summer to give my dad's managers vacation time. Between all of that, I was making about 1k/month in the mid 80s.

But that doesn't really help OP's kid.

In this economy, "go out and get a job" isn't going to be particularly easy with no degree and no skills, when everybody has already hired temporary help for the holiday season. There needs to be a plan for something else to fill up 40 hours of his week if he's not working.

Plus, no offense intended to the OP, but there's a possibility the kid is either dumb as a rock, severely depressed, drunk, or high as kite.

Skipping 148 Messages...
solarUS said:   bullcity said:   I worked every summer in grad school, earning $30-40k per summer.
what summer work did you do that paid that much?


wait, are you suggesting that old cliché is actually true?!



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