Dear To Her Credit,

I need help. I have credit card debt. My husband and I sold our house to pay off home loans and moved to Georgia to be closer to family. They can't help us and we can't find jobs. I have been applying for jobs for a year.

I cashed in my 401(k) plan to pay off credit cards, but I still have debt. My husband gets Social Security benefits, and he has cashed in most of his 401(k) plan. I pay the credit card bills, and then we have no money for food, so I use another credit card.

We can't live like this anymore. Can you please give us some advice? I have an interview for an $8 per hour job. 

-Linda

Dear Linda,

Although I cringe a little at the thought that you have had to cash in your retirement plans to survive, I have to give you credit for being willing to do whatever it takes. At least you've taken action -- for example, you sold your house rather than let it go into foreclosure. And you're still trying to pay your credit card bills.

By continuing to pay your credit card bills, you've not only honored your commitments, but you've helped maintain your access to credit when you need it. Many people would have stopped paying by now. Unfortunately, things get worse as late charges start piling on. It's hard to climb back up the hill once the avalanche of fees and default interest charges begins!

In your case, it sounds like your problem right now is not so much debt, but lack of income. If you filed for bankruptcy tomorrow, it still sounds as if the two of you couldn't live on your husband's Social Security benefits alone. An $8 per hour job will buy some groceries and pay a few utilities, but isn't going to solve all your problems, either.

Moving to Georgia, where you have relatives and the cost of living may be lower than the place you lived previously, made some sense, especially if you hoped to share living quarters with family. However, if you look at state unemployment figures, you'll see that Georgia is not the ideal place to look for a job right now. In fact, Georgia has the eighth highest unemployment rate in the country as of Dec. 31, 2013 (figures released March 1, 2013).

You don't necessarily have to move again before you find work -- in fact, that's risky. I've seen people move to look for a job, only to have to move again when they find one. That's expensive.  However, I'd encourage you to expand the area in which you are willing to take a job.

Of course, unemployment rates by state only tell part of the story. For example, all of New York State is lumped into one number. The economy of Manhattan bears little relationship to Jamestown in upstate New York, for instance. If you're interested in a location, research the unemployment rate down to at least the county level.

Unemployment rates also don't tell much about the job market for your particular skill set, or the comparison between wage rates and the cost of living. For example, Hawaii currently has a lower unemployment rate than some states, but the cost of living is sky high. Do your homework to avoid any unpleasant surprises if you decide to move again.

The best solution would be for both of you to find work, especially if your husband is on reduced early Social Security benefits.  

If you have any retirement plan funds left, try to avoid cashing them in, even to make credit card payments. You and your husband need retirement funds for retirement, and every dollar you take out is going to be very hard to replace at this stage.

You are probably already on a budget, but it pays to reevaluate it from time to time. A baseline budget for times like these contains no frills, such as cable, cellphones or eating out, and very few splurges such as convenience food. If you have inexpensive housing and are handy with a crockpot and cooking from scratch, it's amazing how little you can live on until things get better.

If you find work and are still overwhelmed by debt, you may want to consider bankruptcy. A counselor from a nonprofit agency affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies can help you sort out your options.

Wherever your job search takes you, I hope you soon find meaningful work that makes it possible for you to pay your bills and feel in control of your financial life.

See related: Considering bankruptcy? Use the 'divide by 60' test, Pay delinquent debt or declare bankruptcy?