Question: What should I do if I just lost my job and can’t make my bills?
David W. from Las Vegas, NV
Answer: If you’ve lost your job and can’t make your bills, take action quickly, create a plan, and explore options like unemployment benefits, government assistance, and debt relief programs.
Hello David, it’s Finny and I can help you through this challenging time! Losing a job can be a stressful and overwhelming experience, especially if you’re struggling to make ends meet. But don’t worry, there are steps you can take to get back on your feet.
First and foremost, it’s important to take action quickly. Don’t wait until your bills are overdue before taking action. Contact your creditors as soon as possible and explain your situation. Many creditors have programs in place to help customers who are experiencing financial hardship, such as deferral or forbearance programs.
Deferral programs allow you to temporarily postpone your payments for a certain period of time, usually up to three months. Interest may still accrue during this time, but it can give you some breathing room to get back on your feet. Forbearance programs allow you to temporarily reduce or suspend your payments for a period of time. Interest may still accrue, but it can help you avoid late fees and penalties.
Creating a plan is also essential. Start by assessing your current financial situation. Look at your expenses and see where you can cut back. Consider reaching out to a nonprofit credit counseling agency like Money Fit for help creating a budget and prioritizing your bills.
A budget can help you manage your finances and make informed decisions about where to allocate your money. Start by listing all of your income sources, such as unemployment benefits or severance pay, and all of your expenses, such as rent, utilities, and groceries. Then, look for areas where you can cut back, such as eating out less or canceling subscription services. Prioritize your bills based on their importance, such as housing, utilities, and transportation.
Exploring options like unemployment benefits, government assistance, and debt relief programs can also be helpful. If you’ve lost your job, you may be eligible for unemployment benefits. Unemployment benefits can provide you with some income while you’re looking for a new job. You can apply for unemployment benefits through your state’s unemployment office.
You may also be eligible for government assistance programs like SNAP (Supplemental Nutrition Assistance Program) or LIHEAP (Low Income Home Energy Assistance Program). These programs can help you pay for food or energy costs while you’re unemployed.
Debt relief programs like debt management plans or debt settlement programs can also be an option to consider. Debt management plans can help you pay off your debts over time. With a debt management plan, you make one monthly payment to a credit counseling agency, which then distributes the funds to your creditors. The credit counseling agency may also be able to negotiate lower interest rates or waive fees on your behalf.
Debt settlement programs may be able to negotiate a lower balance on your debts. With a debt settlement program, you make one monthly payment to a settlement company, which then negotiates with your creditors to settle your debts for less than you owe. However, debt settlement can have a negative impact on your credit score, and there’s no guarantee that your creditors will agree to a settlement. Check out our article regarding the truth about debt settlement for more information about the consequences you might face if choosing this option.
It’s also important to stay positive and take care of yourself during this difficult time. Surround yourself with a support system of family and friends. Talk to a counselor or therapist if you’re feeling overwhelmed or stressed. Take care of your physical and mental health by exercising, eating well, and getting enough sleep. Remember, this is a temporary setback, and with time and effort, you can get back on your feet.
In summary, if you’ve lost your job and can’t make your bills, it’s important to take action quickly, create a plan, and explore options like unemployment benefits, government assistance, and debt relief programs. Remember that you’re not alone, and there are resources available to help you through this difficult time. With time, effort, and the right resources, you can navigate this challenging time and emerge stronger and more financially secure. Remember to stay focused on your goals, stay positive, and take advantage of the support and resources available to you. Good luck, and don’t hesitate to reach out if you have any other questions or concerns.
Finny the Finance Bot
This response was created with the assistance of OpenAI’s ChatGPT language model and edited by personal finance author, and expert, Rick Munster.