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Maxed Out: On the Verge of Bankruptcy, Again

This episode of Maxed Out is about Karen, a single mom of a 9-year-old girl named Bailey, and she's in danger of having to declare bankruptcy for the second time. She says she'll feel like a loser if it happens again, and everything she cares about — her daughter, financial stability, and her home — is at risk. Karen has no savings for herself or for Bailey's future. Even though she's always short on rent and lives on cash advances, Karen can't help herself from her favorite four-letter word: sale. Find out if financial guru Allison Griffiths can stop Karen from spending her way in to a second bankruptcy when you


Karen's paperwork is the messiest Allison has ever seen, which is why Karen was clueless of her average $945 shortfall every month. A big part of her problem is that she spends $1,552 in cash each month and doesn't know where her money is going, and she's wasting about $470 a month on bank fees alone. Karen consistently gives her ex about $100 on a monthly basis, even though she can barely pay her rent.

Allison puts Karen on a strict budget that leaves no room for shopping and allows for $25 in cash each week. She doubles her debt payments from $200 to $400 each month and will be able to pay it down in four years. Allison tells Karen to stop giving money to her ex and put it into an educational savings account for Bailey instead, and she suggests giving Bailey a $15 allowance each week. Bailey has to track the way she spends her allowance so that she doesn't make the same mistakes her mom did.


Join The Conversation
Revrend117 Revrend117 8 years
Money management is a scary adult-situation that a lot of people take some time warming up to. I would love to watch this episode. I think we all agree that it's one thing to dig yourself into a rut, but it's another to expose a child to those mistakes and drag them through the wreckage of life not knowing if they'll have a meal or a roof over their head the next day. Great article and interesting comments. I'm going to see if I can find more on the show.
geebers geebers 8 years
She needs serious counseling- she clearly has a mental problem if she can continue to spend money like this knowing she is jeopardizing her daughter's future.
skigurl skigurl 8 years
a lot of the time i feel sorry for the people on this show (mostly when savvy describes it, cuz i don't often watch), but this is crazy - she deserves to be broke, because she's wasting away all ehr money!
chatoyante chatoyante 8 years
I think seeing a counselor might be a good use for the money she's going to save...she needs to figure out this compulsive shopping issue and figure out another way to relieve stress/have fun/whatever it does for her.
Calimie Calimie 8 years
Whoa. I'm really surprised you could have that problem *twice*. We have a similar series in Spain and it's quite different. Most of the time, they're families who bought a house while they were still paying their old house. Now they can't sell their old house and have to pay both. That's a problem and it shows shortsight but it's not as crazy as the one explained above. Also, they usually show people who have a business that failed or they don't know how to manage it and give them tips and advice about it. Besides, I can't remember any in which they would give money away. In fact, most would borrow from family and use credit cards like crazy.
Colleeninator Colleeninator 8 years
I don't know how hard this is to figure out: If you don't have the money, don't go shopping. Having a place to live comes before clothes. What good would all those clothes be if you didn't have anywhere to keep them?
refinedharmony refinedharmony 8 years
I wish I got this channel, I would love to actually see these people. A $945 shortfall???? I can't even imagine. Do people really just walk around buying things thinking to themselves "eh, I can afford it!" ??
MsWalton MsWalton 8 years
I totally agree w/bluepuppybites. I learned a lot about bad money management from watching my parents and made a lot of mistakes in my younger years. Perhaps if this was taught in class, many could avoid bankruptcy.
bluepuppybites bluepuppybites 8 years
This is why I think money management should be taught in the school system. Some parents have no clue what they're doing so why would we expect them to teach their kids.
lilkimbo lilkimbo 8 years
I think too many people abuse bankruptcy and look at it as "an easy way out." (Of course, it's not, but I still think some people view it as such.) Bankruptcy should be for people who have a sudden change in circumstances. (i.e. women who leave their abusive husbands despite knowing they can't take care of themselves financially, people who need unexpected medical treatments that aren't covered by insurance, etc.) It shouldn't be for people who just buy what they want even though they can't afford it! (Before people get upset, I know that, for some people, shopping is what keeps them sane and they are actually chemically addicted to shopping. However, I feel that percentage is pretty small when compared to the number of people who declare bankruptcy due to credit cards bills that have accumulated as a result of purchasing clothing.)
ilanac13 ilanac13 8 years
you would think that someone would learn after doing it once - but obviously she hasn't. will they even allow you to declare bankruptcy a 2nd time? that's just awful!
Martini-Rossi Martini-Rossi 8 years
this is insane!
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