Well, let me first address the goody-two-shoes out there: Yes, if you took on debt, and you are staying afloat, have a job, and even if you find it difficult to pay your debts, mortgage, kids college, food, car, etc., go ahead and do the best you can to pay off your credit cards, and try to keep your good credit. And, of course, try not to take on more debt than what you can handle...
So now, after I dispensed with the boring goody-two-shoes stuff, let's get real. I don't think I have to add those income distribution graphs that shows wages for the last thirty-plus years relatively flat, while corporate income has shot up over 250%, and CEOs income almost 300%.
Like hamsters on a wheel (which goes around with increased speed), people work harder and harder (so-called productivity increase), as their wages stay stagnant. Workers' rights, the social safety net, pensions, etc., are chipped away little by little. This pushes people to use credit with more frequency. It's akin to indenture servitude...
Another thing to consider: The rule of law is no longer. Or should we say: There is one set of rules for you and me, and another for the rich, the powerful, the well-connected. We have to abide by the law; the rich and powerful can commit crimes with impunity. They can loot the banks out of trillions of dollars, and then leave cities, states, and the federal government (you and me) to pick up the tab; they can start wars of choice with the intent of transferring trillions of dollars of tax-payer's money to war profiteers; They got bailed out; we get sold out.
It's a criminal plutocracy engaged in an orgy of greed, using you and me as pawns; as things to be exploited.
So, first consider this. If you fall down, your great efforts to stay afloat notwithstanding, please consider the possibility that a contributing factor to you falling down may be the fact that this fucking god-dammed system may be rigged, and it has become so oppressive and corrupt, that it is ensnaring more and more good, decent, hard-working people.
There is nothing wrong with you. You are not deficient; you are not unworthy; you are not irresponsible. You were just trying to survive in a system that has become repressive, oppressive, and corrupt. A rigged system.
One of the ways this brutal system has of destroying people is by putting so much pressure on you, that eventually you crack under it. Your stress level goes up. You find yourself living under a huge amount of mental stress hour after hour, day after day, month after month. You get sick; your mind buckles under the stress.
Don't let that happen to you. If you think that you did everything you could, and you are trying to hang on to the under-water mortgage, the car, and stay afloat with the credit card bills, but you see the hand-writing on the wall, and you start to understand that you are not going to be able to keep up, then, fuck it. Let it all go before you lose your mental acumen. We need you strong (mentally), for the revolution.
Plan ahead... Make an inventory of what you have, resources, etc. Let the five-bedroom house go and get a studio, and keep the family intact (if you can). Let go of the car; stop paying the credit cards.
And most importantly, never, ever, ever, under no circumstances, ever, talk to a debt collector. In fact, when you are cutting back, go ahead and disconnect all your land-lines, and change your cell phone number. Also, as the debt collectors start to call, make sure to turn off the ringer on your phone, either home, business, or cell phone.
If you think you are in a situation where you can make some payment arrangements, then you set the timing of when you want to contact the debt collectors. Maybe you can talk to one of those non-profit agencies that help you come up with a plan. Then make a budget, and send a letter to the company with your offer, and a small payment: $15.00, or whatever.
Also, a non-profit credit counselor (make sure they are legitimate) can advise you on whether you should file for bankruptcy. And if so, then go ahead and do it--if you don't see any prospect of being able to pay the debts.
But again, do not subject yourself to endless haranguing and abuse by debt collectors; ever. Don't talk to them!
Don't be ashamed to seek help; food stamps; food pantries; WIC; help to families with dependent children.
But most importantly, if you are able to keep your sanity and mental acumen, you'll have what it takes for a come-back.
Do an inventory of your experience, talents, resources, friends, contacts, passion, etc. Come up with a couple of ideas for a home-based business based on your assessment. Here's what you need to be in business: Business license; (sometimes) a fictitious name certificate. In most places you can do those two things for less than $100.00.
Then set up a Website, a PayPal account, get a new phone number (cell phone), print some business cards for your new little business, and hit the streets selling and marketing. Go to mixers, join local organizations, check out the Small Business Development Centers.
It's a new start... And the thing is that you'll be escaping the rigged system where employers use the fact that you have been unemployed too long, against you. Or that your credit may not be perfect, in order to deny you a job.
When you have your own small proprietorship, and your nice business cards, and your brochure, or marketing material ready, and you talk to potential clients, they are not going to be interested about what your finances are like, or your credit score. They only want to know if you can provide the service or product.
But again, it's not easy starting your own business, so you need to have your mind clear (the best your can), and you need to have (mental) energy to get your little enterprise going.
Either way, regardless of what you decide to do, just know that at least here from RP, I don't think you are a bad person, or irresponsible, or not worthy. Your value is not related to the car you drive, or the type of house you live in, or how many material possessions you may have.
And remember, save some energy, and talent so you can help in the ongoing and growing revolution so we can all one day (the 99%) take on this criminal system, and change it.
Peace.
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