Staring at the road to ruin
El Segundo resident Kathy Caliup can’t say for sure when it all started slipping from her grasp -- the credit card bills, the car payments, the rent. All she knows is that she looked around recently and realized her family was essentially one setback from homelessness.
“It makes me physically sick,” Caliup, 55, told me. “I lay awake at night wondering how I’ll get by.”
Caliup’s troubles mirror those of countless other people who have found, often through a combination of bad luck and bad decisions, that the tentacles of the recession are pulling them ever closer to financial ruin.
According to the California Department of Social Services, requests for emergency food assistance have risen about 40% since this time last year. The number of food-stamp recipients is up 21% and welfare rolls have grown 9% after declining for almost a decade.
“These are huge increases,” said Lizelda Lopez, a spokeswoman for the agency. “There’s lots of need out there.”
Caliup, a single mother of two, isn’t what you’d call a reckless person.
She’s worked for just one company -- Macy’s -- since she was a teenager.
These days, she can be found behind one of the perfume counters at the Culver City store.
Caliup came into some extra cash in 2004 when her parents passed away and she and her sister sold off their Inglewood home.
Caliup used some of the proceeds to buy a new Toyota Highlander.
The rest went to day-to-day expenses.
Life dealt Caliup a body blow in 2005 when her then-15-year-old son was diagnosed with cancer.
But the family handled the challenges and the healthcare bills, and they persevered.
Her son’s cancer is now in remission.
Things remained relatively stable until last fall.
That’s when Caliup started to notice that the economy was chewing away at her commissions, leaving her with less money each month. Around this same time, the rent for her two-bedroom apartment was raised to $1,725 from $1,600.
Caliup, like so many others, turned to credit cards. First one card, then another. Before she knew it, she was running balances on 12 accounts. Her total credit card debt now tops $25,000.
“I don’t know how it happened,” Caliup said. “It just snowballed out of control.”
In February, she knew she’d have trouble paying the rent for her apartment. Caliup made a partial payment and contacted the property manager to explain her situation.
Several days later, a notice appeared on her door: Pay up or move out.
Caliup immediately went in search of a new apartment. She found one nearby that cost $1,120 a month.
“But when I applied, they did a credit check and my score was too low because of the credit cards,” Caliup said. “So I didn’t get it.”
She told her property manager that she needed a little more time to find a new place. The property manager began eviction proceedings.
Steve Silverstein, an attorney representing the property manager, said Caliup’s case is hardly unique.
“Everybody’s got problems in these times,” he said. “Hers are no different from others.”
Caliup is now hoping to sell her Highlander and buy a cheaper set of wheels. She also hopes to sign a lease for an apartment in Hawthorne costing $1,100 a month. The problem is, her 16-year-old daughter is a sophomore at El Segundo High School.
The school told Caliup that her daughter could finish this year. Next year, she may be forced to switch to a school in Hawthorne.
Caliup is trying to be brave. But there are times when she’s not so sure.
“Sometimes I see homeless people,” Caliup said. “Now I understand how this happens. It could happen to me.”
Joy Thormodsgard, chief executive officer of Consumer Credit Counseling Service, a Ventura County nonprofit organization, said this is an increasingly common sentiment among people who never thought they’d start slipping down the economic ladder.
“We are seeing a dramatic increase in the number of households and individuals in financial trouble,” she said.
Thormodsgard advises people in this predicament to first take a deep breath and remember that they’re not alone.
She also likes to remind people that financial problems are usually fixable, although not always easily.
The first step, Thormodsgard said, is to break down your debt, spending and income, and come up with an “action plan” to get control of your cash. Write down all expenses -- even minor things like cups of coffee or candy bars -- to get an accurate picture of where the money goes.
“If you have an action plan, landlords and lenders may be willing to work with you,” Thormodsgard said.
An experienced credit counselor can be helpful in negotiating with banks and property owners.
But avoid services that ask for hefty upfront fees to get rid of your debt or fix your credit score -- they’re frequently scams.
Instead, deal only with nonprofit organizations that are affiliated with either the National Foundation for Credit Counseling or the Assn. of Independent Consumer Credit Counseling Agencies.
Caliup would like to think she’s through the worst of her difficulties. “I feel like I’ve already hit bottom,” she said.
I hope so.
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David Lazarus’ column runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.
