My husband works at an auto supplier and he was put on layoff shortly after Chrysler declared bankruptcy April 30. Although he is expected to go back to work, he is getting only unemployment benefits in the meantime.

You cannot expect a household budget to be “business as usual” when someone is on unemployment. The sooner you take effort to cut costs, the longer your money will last.

If you need tips on how to cut expenses, I have a series based on typical household budget categories at The Downsized Budget: How and Where to Cut Back. The examples given are for my local readers in Monroe County, Mich., but those of you who live elsewhere can adapt the ideas to your circumstances.

I mentioned this scenario as a possibility in a previous post Chrysler layoff recovery plan: What about college? My husband works at an auto supplier and he’s been off work for all of May on top of several weeks of layoff in January. We don’t know when he’ll be back to work because it’s not yet business as usual for Chrysler.

I did a pretty good job estimating our household income for 2009 when I filled out the first round of financial aid paperwork. We didn’t know that my husband’s employment situation would be worse than I thought.

To be fair, when Chrysler went on shutdown, one of the first things my daughter said was that it was time to write an appeal letter to financial aid.

I didn’t want to go through the hassle of redoing the 2009 estimates. It’s one thing to provide an income report when you have actual W2 statements to rely on. It’s another thing to find all the appropriate pay stubs and run salary and benefit numbers on a spreadsheet or calculator.

As it turns out, one of my sisters works at a college financial aid office. During a family gathering this weekend, she insisted that I review our 2009 income and send the revised figure to my daughter’s college. Another sister, who works as an academic advisor at another college, also recommended I send a follow-up letter.

When we added up the the pay stubs and unemployment benefits so far this year, we did see that 2009 income will be less than I expected.

So my daughter and I wrote a letter to the financial aid office today explaining what happened, here’s the family income year-to-date, here’s what that would be on a pro-rated basis for the year, and that it is lower than what I previously expected.

Will the revised income report make a difference in the final award package? I don’t know. But my sister said it was worth a try. And, well, we’ve pretty much soaked up all the private scholarship funds we can find.

If you do write an appeal a letter either before or after the financial aid offer arrives, be sure to include your student’s full name and student ID number, along with a way to contact you for further information. Remember that your main application is already on file – this letter is meant to update key details.

Our letter was only one typewritten page, and it’s going in the mail Tuesday.

Here are the web sites we used as a reference point:

• eHow’s How to write a financial aid appeal letter.
• FinAid specifically the glossary entry on professional judgment and the FAQ section.

(Update: My daughter’s college ran an estimate for us in their formulas, and replied that the updated household income I reported in my letter would not make a difference in the final award at this time. But they did send me some official appeal paperwork to keep on file and send back to them should that step become necessary.)

Ohio’s unemployment rate in April was 10.2 percent.

Keep in mind that’s BEFORE the impact of Chrysler’s bankruptcy filing settled in with factory and supplier shutdowns in Michigan and Ohio.

It really doesn’t matter whether a layoff happened because of the Chrysler factory shutdown, the Monroe or Toledo or Detroit city department budget cuts, any number of school districts in Michigan and Ohio that are announcing layoffs, or a small business going under that never made the headlines.

It also doesn’t matter whether your child support comes through the Michigan Friend of the Court system, the Ohio Department of Job and Family Services system or an equivalent program sponsored by another state.

The bottom line is the same: the parent who receives child support needs to be prepared to deal with late, or temporarily no, payments for whatever reason that may come up.

The background: When a child support account is created, the court that handled the divorce or paternity case uses a formula to determine how much money should go from one parent to the other. There are state and local rules regarding how often that amount can be reviewed, and for what circumstances.

The usual procedure is that child support is automatically withheld from one parent’s paycheck, and within a couple of days money is automatically deposited to the other parent’s bank account. Every week or every month, the account is credited with the amount that is actually paid vs. what was due.

Be warned: I have little sympathy for parents who might want to jump into this thread and complain that the child support system isn’t fair. It is what it is.

The bureaucracy was created to prevent parents from failing to follow through with child support court orders. State governments are not interested in putting children on welfare and public assistance programs when the preferred alternative is to have both parents contributing financially to the upkeep of the children.

So while you can lobby your lawmakers and policy makers about the details of the child support program, such a system is absolutely necessary.

Now … what happens if the money is late or in limbo because of a layoff or a job change under more positive circumstances?

The account is updated with the amount in arrears, or the past due.

The state child support systems have procedures in place that can, depending on the circumstances, take measures such as to snag a federal tax refund, a state tax refund or a lawsuit settlement; or order that past due amounts be paid off with extra money taken out once the parent is employed again.

As long as you stay “within the system,” so to speak, someone is keeping track of that past due. Therefore, the parent who is supposed to receive the money, in theory, will eventually get all the money that was skipped.

That doesn’t solve the short-term problem of child support not arriving when it was “supposed to.”

If you receive child support, you need to arrange your financial matters so that you can handle a late or shorted check or a temporary stop to the payments.

I know, this is easier said than done. But I had to deal with that situation as my ex-husband transitioned from one job to the next, and from military payroll to a civilian payroll and back again, during the years he was paying child support for our daughter. While the account was actually paid in full shortly before our daughter turned 18, there were the occasions over the years when the check was late or when I received no child support for a few weeks. We also noticed overlapping payments from time to time. It can take a little bit of time for the system to catch up and the payment schedule to settle out when someone is changing jobs.

To help you improve your cash flow cushion, you will find practical money-saving tips at The Downsized Budget: How and Where to Cut Back; and tips of how to seek out financial help at Do you need assistance? Tips to read first.

Keep in mind that the details can be complicated as you seek out financial assistance on behalf of children of split families.

For some programs and services, you need to report the current income of the family. Therefore if child support is not being paid, it’s not part of your current income. There will be other programs and services where court-ordered child support will be counted as income whether you are receiving it or not – because, in theory, that money catches up eventually.

In the meantime, go on the state government web site for the state where your child support case is handled to look up the procedures and policies. You need to know what rules are currently in effect, and how they apply to your situation. Those details are constantly changing.

It would also be smart to keep the phone numbers handy of the lawyer who handled your legal action and the caseworker or office who handles your child support.

You also want to consider setting up an on-line account where you can monitor payments as they are made and the balance due. Michigan has just started such a system.

Follow the links to read the articles.

The lead story: As home of the auto industry, effects of the crisis are depending.

“I’ve never had a downturn affect us like this one. We have a lot of people who owned their own businesses who have lost those businesses, people who have lost their jobs. This time, it’s hurting our school, hurting our parish,” says Msgr. Anthony Tocco, pastor of St. Hugo of the Hills parish in Bloomfield Hills.

The first sidebar: No job, no benefits, no progress.

The second sidebar: Catholic community in Pontiac works to help.

The archdiocese also has a page on economic crisis resources.

If so, you need to read the Detroit Free Press’s Cover Story report and related sidebars today on Endangered Dealers.

And then pay close attention as you go about town this week and notice …. How many auto dealers does your city have right now?

How many jobs in YOUR city will be lost as this all shakes out?

If you have any friends or relatives in that situation, pay close attention to what they are saying and help them come up with a layoff recovery plan and a downsized budget plan.

One of the questions someone had this week was how the Chrysler layoff will affect child support. I did some poking around on the michigan.gov site and here is the page that answers that question.

Quote:

Requesting a support modification motion with the court. You may choose to file a motion to change the support order more often than every three years if there is a substantial change in income for either party.

The office of the Friend of the Court can provide forms and instructions to file this type of motion. You may also contact an attorney to file a motion requesting a change in the amount of support.

If both parents agree to change the support order to the amount shown by the child support formula, they may sign an agreement. Once that agreement is put in the form of an order, signed by the judge, and filed with the county clerk, it will become a court order.

For assistance in modifying a support court order, contact your local Friend of the Court. The listing of FOC numbers can be found at http://www.michigan.gov/documents/FIA-IVR-Phone-Numbers_94093_7.pdf.

He will get only unemployment benefits for the duration. There is no supplemental pay under his contract.

Since the bankruptcy filing scenario broke last Thursday, we’ve had off and on discussions about what bills need to be paid when, when the last paycheck will be available, when the first unemployment check will arrive, etc. Although he has gone through lengthy layoffs previously, most recently the five-week layoff in January, the current situation has a lot of unknowns. He technically still has a job, but we don’t have any idea when he will be back to work.

I assume those of you who are also in this situation have had similar discussions in the past few days. I will add another item to your checkoff list: inventory your resources.

Now is the time to make use of whatever resources you have already paid for or acquired. The goal is to make whatever cash comes into your home last for as long as possible.

• Have you been stockpiling groceries and personal care products during the sales? Make a list of the menus you can make with those groceries, and eat them up.
• Do you have gift cards or cash left over from Christmas or birthday or whatever occasion that have remaining balances not yet used? Spend that money.
• Have you pulled out your summer clothing to find out what still fits and is in good condition? It will save you from shopping for replacement pieces.
• Do you still have access to health coverage or a discount pharmacy plan? If so, that’s one less headache to deal with.

What about college?

This situation may be easier to resolve than you think.

Currently in college or will be this fall

If your student is currently in college or will be this fall, you have most likely already filed the Free Application for Federal Student Aid and any other paperwork required by your college such as the CSS Profile. The deadlines for most programs that southeast Michigan students quality with the FAFSA was March 1, although some colleges wanted the forms by Feb. 15.

If you haven’t filled it the FAFSA, do so anyway. There may be some opportunities remaining, you just may not get all the funding you would have otherwise qualified for.

Let’s say your income status has significantly changed since you filed that application. Perhaps you are now in a layoff of interderminate time because of the Chrysler upheaval. In that case, many financial aid experts recommend sending a letter to your college’s financial aid office explaining the new circumstances. University of Michigan-Dearborn, for example, has set aside money specifically for hardship cases.

USA Weekend, which is distributed locally with the Detroit Free Press, had an article about that situation today.

For some background, FinAid.com has a detailed article for parents and students on how to maximize your financial aid funds that explains how to work within the existing rules as you submit your applications for grants and low-cost loans.

Now, one of the pieces of “advice” I got when one of my daughter’s previous college financial aid award letters arrived was to apply for any and all available scholarships. I’ve also seen that “advice” in financial news articles in late spring.

The problem is that, by the time financial aid award letters have arrived, it’s a little late in the year for local students to be applying for scholarships.

Most of the scholarships that students in Monroe County, Mich., actually win have deadlines that range from mid-February through early April. There is the occasional scholarship that has a summer deadline, but that’s not how most of them work in our area. Check my archives under keyword scholarships.

College is a year away

If your student will be a senior in high school this fall, be aware that calendar year 2009 income is what goes on the college financial aid applications for the 2010-2011 school year. Since household income is one of the key factors that is used in the college financial aid formulas, your currently lower income will be included in the calculations.

What you want to focus on in the meantime is building up the student’s resume. If a summer job or part-time job can’t be found, then have the student do something useful with community service or leadership skills this summer that will look good on college and scholarship applications.

This is also a good time to review the college recruiting material, look up the college web sites and have more discussions about the campuses you visited as a junior. After all, many of you will be filing college applications this fall.

You can also do some research on how to write a scholarship essay. Some scholarship have deadlines starting in the fall, but many of the scholarships that students from Monroe County, Mich., actually win are announced after Christmas break with deadlines ranging from mid-February to early April.

In the meantime, parents need to look for any possible way to save money on household expenses. I’ve got lots of tips and links in this blog and in my sidebars. Your goal is to keep the bills paid and your credit report in as good shape as possible.

College is more than a year away

If you have other pressing financial matters to take care of because of a layoff, I would not too caught up in the details of college financing.

There are some long-range planning techniques that can be helpful (FinAid.org has a good explanations), so if you’ve already made those arrangements or would like to consider some of those options, that’s fine.

But here is what you have to remember: the rules for programs such as grants, loans and scholarships change from year to year.

President Barack Obama ran on a campaign platform that included big changes in how the federal student college financing system works. Depending on what gets approved and when, the federal program opportunities and rules could be very different by the 2010-2011 school year than what we now see.

A year ago, I reported on this blog about the college financing market – specifically how the credit crisis led to programs getting dropped or changing their rules, leaving parents and students scrambling.

The Michigan Promise grant program has changed its rules repeatedly since it was introduced. One graduation year made a difference as to whether my daughter could use that money for an out-of-state college. (She couldn’t.) There was even some talk a few months ago about dropping the program completely because of state budget issues.

Scholarships also come and go from year to year, based on investment returns and what the sponsoring committees or foundations. Example: a scholarship opportunity that my daughter would have been an ideal candidate for fizzled out her senior year when the sponsoring group rewrote its guidelines.

Another program that is just starting are the Michigan Promise Zones. There are none available in Monroe County, Mich., but Detroit students are eligible for this offer.

So what do you do in the meantime? Encourage your student to pay attention in class, get good grades, and become involved in community service, volunteer projects and leadership roles. That way, your student has a resume that is ready to submit for whatever scholarship opportunities will be available down the road.

In the meantime, save money whereever you can. Here’s my archive on high school expenses.

About 1,800 Chrysler retirees were shocked to discover that their benefit payments were voided Friday morning.

Lynn Feldhouse of Rochester Hills actually saw the deposit disappear as she checked her bank account online. “This can’t be good,” Feldhouse said. “I called the bank, and they told me there was nothing they could do because they got a message from Chrysler telling them to reverse the entry.”

The problem affected people who have a supplemental pension, which is not insured by the Pension Benefit Guaranty Corp. Because that portion is backed only by Chrysler, it becomes part of Chrysler’s asset base in the bankruptcy.

Chrysler is aware of the problem and is telling those affected that they will receive the PBGC-insured portion by May 18.