With Micawber owing money, he retrieves little Alice, age five, from the workhouse to live with him and his family. Micawber takes in a lodger, Mr. Gideon Babbitt. Micawber tells of taking a position as a lawyer for the Sturgeon family, as well as learning the truth about his dismissal from the family.

Mr. Micawber learns that his lodger Mr Babbitt is part of the theatre and accepts a position as well. Mr. Cheney sends Mr. Kane to collect the debt of £10 7s 8d, now with interest it is £11 3s & tuppence. Mrs. Micawber retrieve a gift that her late father had bequest upon Mr. Micawber.