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Released: January 15, 2013

Hanging on: Life in the red

Source: Benedict Carey, N.Y.Times (Free Registration)

The belt-tightening was the easy part. Cancel the cable. Skip the air conditioners. Ration the cellphone, unplug the wireless Internet, cook rice and beans — done, and done.

The larger problem for LaKeisha Tuggle, 33, who had lost her public relations job, was cash flow: After her unemployment insurance and savings ran dry, there was none. So she did some creative financing, juggling loans, credit lines, tax refunds and educational grants, to stay afloat — until a Sunday in September of 2011, when it looked as if the jig was up. She awoke to a foreclosure notice on her front door that announced her home would be auctioned in a week.

The psychological burden of debt not only saps intellectual resources, it also reinforces the reckless behavior, and quickly, Dr. Shafir and other experts said. Millions of Americans have been keeping the lights on through hard times with borrowed money, running a kind of shell game to keep bill collectors away.

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