Substitute Teacher Lives in Shelter Instead of Paying Rent. – Tim

“Dear Steve,

My Brother-in-Law is deeply in debt. He was laid off from work 6 years ago and hasn’t found a decent job since. He isn’t very smart when it comes to money and lived off his savings until it was all gone. He is now 60 years old, has several thousands of dollars on credit debt, owes thousands in taxes because he cashed out his 401K.

He gets a pension from his previous employer of about $800/month. He substitute teaches which brings in about $120/day when he gets a job. The credit union he belongs to takes money from his account to pay his credit debt, so he doesn’t have any money to live on.

He is staying at a shelter instead of renting a room. He talked to some of the lawyers who would help him with his problem, but they want to be paid several hundred dollars for their work. He doesn’t have that kind of money, so he basically is stuck.

What options does my brother-in-law have in getting clear of his debt (including taxes) so he can have enough to get a place to live and keep his pension?


Dear Tim,

The best thing you can do for your brother-in-law is to help him out by paying for the lawyer. There are no simple of easy solutions to deal with his combination of debt, especially the IRS debt.

While the IRS is a kinder and friendlier government entity these days, even a reduced repayment plan, like an offer in compromise is going to require some funds to pay back at least part of the debt.

Maybe you and other family members could all pitch in and pay for the lawyer appointment so he can get some help.

I’m curious, why doesn’t he just switch banks so that he can keep some money to live on?

See also  Should I Cash Out my 401K to Pay Off My Credit Card Debt. - Taneah


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