Debt Relief Strategies After Losing Your Job
Losing a job is a traumatic time because you are not sure how you are going to continue to pay your bills. It is always a good idea to have debt relief strategies in place that will allow you to adjust your personal finances to accommodate this unfortunate, but hopefully temporary, situation.
Grasp Your Finances
Your goal is to get your monthly expenses down as much as possible.
When the initial shock of losing your job has worn off, it is time to swing into action. The first thing you need to do is to apply for unemployment and find out when you will start getting benefits and how much they will be. If you received any kind of severance package from your old job, then you should put that into your savings account.
If you do not already have a monthly budget on paper, then now is the time to create one. Write down all of your monthly bills and expenses and then that will tell you the minimum amount of money you need each month.
Lower Your Debt
One of the best debt relief strategies you can employ when you have just lost your job is to use your monthly budget to lower your expenses. If you have land line and cellular phones, then you may need to eliminate one of them to lower your monthly bills. Your cable television service, weekly entertainment budget and food shopping budget should also all be analyzed for ways to reduce the amount of debt you carry each month.
Consolidate Credit Cards
There are credit card consolidation companies that will work with people who have just become unemployed to help lower debt. If you are carrying several hundred (or thousands) dollars per month in credit card payments, then you can lower that significantly by consolidating those accounts. The money you save can be applied toward paying other important expenses such as food and gas.
If you cannot find a company to help you consolidate your debt, then consider tapping into your retirement fund to reduce your monthly obligations. It is a wise investment if it cuts your monthly payments in half or better while negating unmanageable interest.
Use a Credit Counselor
Debt relief can be tricky when you are unemployed. If you want to try and negotiate payoff amounts with your creditors, they may not be willing because of your employment status. Negotiating lower payoff amounts for your credit card debt is another way to significantly lower your monthly obligations.
If you are meeting resistance from your creditors on the subject of negotiating payoffs or getting lower interest rates on your credit accounts, then consider working with a credit counselor and professional debt negotiator.
The counselor can aggressively negotiate with your creditors on your behalf to get you the payoff amounts you can live with. A credit counselor can also help get you into a debt consolidation program if you are unable to get your debt negotiated down by other means.
Generate Extra Income
A good debt relief strategy for unemployed people is to find ways to generate any kind of income while searching for a full-time job.
Odd jobs or even part-time jobs will at least put money in your bank account while you are waiting to land that next step in your career. If you can avoid allowing your financial accounts to go delinquent while you are unemployed, then you will be that much further ahead when you get a new job.