It could be a few different things such as a skin dermatitis or mange. Usually sores like you are describing on the chin are due to a condition called folliculitis (inflammation of the hair follicles). This is generally seen in dogs that are susceptible to staph infections, have mites, or are allergic to plastic or other feeding bowls that the chin comes into contact with. Your Vet will need to do a skin scrapping and examine it to determine if it is due to mites or a bacterial organism.Depending on the results your Vet will prescribe medication and/or recommend switching to stainless steel feeding bowls.
You can read about this here:
It does sound to me like you could be dealing with demodectic mange. Of course, without a skin scraping, it would be impossible to know for sure. Demodectic Mange is not contagious and frequently will resolve itself as the puppy becomes and adult and the immune system matures. I urge you to have your dog seen so your dog's condition can be diagnosed and treatment can be started. Below are websites on the various conditions that may cause hairloss like you describe.
Here is a website on Ringworm:
Here is two on Mange. Demodectic
You can read up on allergies here:
Ivermectin is freqently used to treat mange but should not be used on herding breeds. Some herding breeds are hypersensative to the drug and it can kill them. You can read about precautions, usage and dosing information here.
And about toxicity here:
I've had some success with topical Happy Jack Mange treatment, but I will warn you that it smells like sulfur and stains everything it touches. It is not a good idea to have your dog in the house with this on it. However, I did see hair regrowth in a week with this product. I was also using ivermectin as well.
Since finances are an issue, the following organizations may help.
This group helps low income families with vet care.
This organization help people with emergency medical care in some cases.
Care Credit http://www.carecredit.com
Quick application and approval for care credit card. You can sometimes apply and get approval while you are at the vet office.
American Animal Hospital Association
Helps animals that have been abandoned or if the owner is having financial hardships
Angels 4 Animals http://www.Angels4Animals.org
This organization offers financial aid or treatment to those pets and owners in need.
I hope this information is helpful to you.