Asked by Anonymous
I've handled a couple of these cases pro bono (typically Consultants get paid for their product, advice or both) so I'll share what I can here and hopefully it's useful.
What you should do:
1) Consolidate and priortize your loans from first to last. You borrowed from different ones at different points of time, and the interest offered is undoubtedly different. Put it together in a sheet so you know the minimum amount you need to fork out by the latest date, and how much time you have to get it together while you're looking for employment.
2) You're going to have to get the lowest interest possible on money. That means accountability to the people in your life - spouse, grown children, older parents, and other relations who will take pity on you and lend you some money at no interest.
Their presence in your life will give you a degree of accountability, lest you're just a bad, irresponsible person.
Yes, it's difficult and feels like lose face. I understand this. I sympathize with this. However. Swallow your pride and do it, and you can bounce back from this.
The alternative is much, much worse.
3) You may opt to consolidate this debt under one money lender. There are pros and cons to this:
Pros: Organization/consolidation of debt, and ideally under the lowest interest rate of all the lenders
Cons: You could accelerate the potential claim on your property sooner if the amount balloons up past $50,000. That's when the threat of legal claims tend to come in. Sums smaller than that tend to be like constant nagging, then harassment, the occasional threat - which to be fair, is not necessarily unwarranted.
4) I understand that you could be a low wage worker, because I get this reason/excuse from them all the time.
No. **** that.
If you have to take a pay cut while paying debts and while sending applications for the level of job you used to have, you DO it because you're on a clock.
I cannot emphasize how important this is without coming across harsh, but you already realize the gravity of your situation or you wouldn't be asking for help.
5) The worst case scenarios are simple
a) Bankruptcy - that's the easy one. Once your debt balloons - and it will, because the compounded rate of interest from money lenders is absurd - it will hit a point where it makes more sense to bankrupt you before the other money lenders will. So you'll be bankrupt and STILL have a whole bunch of very angry people after you. Not a pretty picture.
b) Forever in servitude - If you don't handle this smartly, you could be in debt for life, paying off interest and passing on that burden to your living relatives. Worse, your children. There is no escape from it just because you are bankrupted or not bankrupted. Trust me. I have many second-hand experiences.
I did not address 'why not get a bank loan' because if you were in a position to get a bank loan you would have gotten a bank loan. That's the benefit of speaking from experience.
Best of luck.
If you really, really need some help on this, my contact is below - but there's not much else I can do for you that I haven't already said.