My Overtime Hours Were Cut and I’m in Big Debt


Dear Steve,

Everything was going great last year; I had just bought a nicer car and started making modifications to it when my work place suddenly dropped out hours from 58+ to less than 32.

I drained all my savings and maxed my credit card to stay caught up on my bills. Now things have picked up enough at work to get 40 hour weeks regularly which has been barely enough to make my bills.

Now I’m facing the hard fact that I need new tires on my car and I don’t have the money to pay off my credit card.

My insurance company canceled my policy because I was late two months in a row.

My credit union just denied my request for a loan to get tires on my car and I fear shortly my tires will blow out as the alignment is off. I’m quickly sliding down a steep slope I never thought I’d see myself heading to.

What are my options financially? I’m running out of options.



Dear Alex,

I know exactly what it is like to feel like things are going great, just to get punched in the financial stomach. It sucks. No doubt about it.

Hindsight is always sharper and clearer than the moment in front of you. I would bet you’ve learned a valuable lesson about living beyond your means. Faced with the same situation again I would guess you’d be a bit more reserved about spending up to the limit you did.

Overtime pay is something that catches many off guard. It feels like a real boast to your regular income, but in fact it’s not. Technically overtime is pay you get when you are asked to work more than normal. If I could rewind the clock for you I’d suggest living off the 40 hours a week and banking and investing the difference. I realize that’s easy for me to say at this point. But overtime will always stop.

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Now that you are back to a regular schedule, it’s awesome that you’ve still got a job. But how do we deal with the resulting debt?

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

When your hours were cut you ran through your financial safety net. You also used more credit trying to stay current. And while that strategy felt like it worked. In reality you were getting further and further behind each month.

So we find ourselves today at a crossroads of trying to increase your income to a point where it was higher than when you were at 58+ hours. You’d need the extra income to get caught up and get ahead.

But I don’t know how realistic that is.

An alternate solution would be to talk to a local bankruptcy attorney about a legal fresh start. One of your legal options is to learn from what happened, wipe the slate clean, and start over.

According to a study by the Federal Reserve Bank of New York, people who file bankruptcy do better financially than those that don’t when facing money troubles.

I’m not automatically suggesting you should file bankruptcy but I am strongly suggesting it is an option you should carefully evaluate. For a whole lost of articles on the truth about bankruptcy, click here.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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