Losing your job is a traumatic and stressful event that often leaves people wondering how they will pay living expenses much less deal with their other debts. Dealing with debt after a job loss adds to the stress of trying to find a new job while making ends meet. For those who have emergency savings, the stress may not fully set in for a couple of months; however, once the emergency savings has been depleted, the stress begins to grow.
Below are tips for dealing with debt after job loss. While all of these tips may help you survive financially until you find a job, you may still need to consider your bankruptcy options if your unemployment continues or you find yourself facing lawsuits or a foreclosure.
Dealing with Debt After a Job Loss
- Apply for unemployment benefits. Some people may feel embarrassed about applying for unemployment benefits; however, these benefits are designed to help people who are experiencing a temporary job loss. While your benefits will on be a portion of your salary, they will help you make ends meet.
- Cut expenses. It is important to begin cutting expenses as soon as you lose your job. If you wait for several months to begin cutting your expenses, your emergency savings and unemployment benefits will not last as long. Consider cutting off the cable service or at least reducing the service until you find another job. Shop sales at the grocery store and plan your meals around what is on sale rather than what your family is asking for that week. Cutting expenses is one of the the first steps for dealing with debt after a job loss.
- Prioritize your bills. Dealing with debt after a job loss is much easier if you know what you need to pay first. It may become necessary to stop paying some bills if money becomes very tight. Your first five priorities should be rent/mortgage, food, utility bills, insurance and medicine.
- Make a budget. If you do not live by a budget, make one now. It is important to know what you have coming in and going out especially when you are dealing with debt after a job loss. You can cut expenses much easier if you have a budget.
- Call you creditors. Some creditors may be willing to allow you to pay interest only payments until you are back on your feet or otherwise reduce the payments. Working with your creditors may prevent lawsuits or at least delay collections until you are able to find another job.
- Do not pay off debts. It may seem like wise idea to pay off debts so that you do not need to worry about them; however, you may need that money if you cannot find a job before your unemployment benefits end. Dealing with debt after a job loss does not always equal paying off debt in full.
- Meet with a bankruptcy attorney. Before you make any drastic decisions, it is wise to meet with a bankruptcy attorney to discuss your options for dealing with debt after a job loss. Bankruptcy can often protect your assets, including retirement, while erasing unsecured debt. You may not be ready to file a bankruptcy case yet but knowing your options will help you make better financial decisions.
Contact an Experienced Mount Holly Bankruptcy Attorney
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The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans and foreclosure. We represent clients in Burlington County and throughout South Jersey.
If you dealing with debt after a job loss, contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.
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