The most recent economic recession pushed a lot of people out of their jobs. Even those in higher managerial and corporate-level positions were not spared from this mass lay-off.
Now, if you belong to this group of consumers, and you’re wondering how you can keep up with your financial obligations then, the following suggestions will surely help you out:
- Focus all your energies on finding a new job. Since you cannot change the situation, the best thing to do is to take positive action right away. Don’t waste any time and start your search for new employment immediately. If you can’t find openings for permanent positions, you may look for a part-time job until a better opportunity becomes available.
- Be Proactive
- Understand your rights. Get to know your rights as a borrower as stipulated in the Fair Debt Collection Practices Act. Creditors must treat you with respect and dignity even if you cannot submit your payment on time. However, you should not ignore or try to hide from your creditors as this can only make the situation worse.
- Pay what you can. If it’s not possible to pay all your creditors because of unemployment, see to it that you pay as much debts as you can. You may try negotiating with your creditor to ask for modifications in your current repayment terms. Politely explain your situation and the reason why you are not able to keep up with your payments as well as you used to. Most creditors would be willing to make adjustments to help a customer keep up with debt repayment especially if the circumstances are understandable.
- Cut back on personal expenses. Do what you can to cut back on your expenses. If you have a family, it would help if every member of the family understands the current situation and would do his/her share to reduce the family’s expenses.
- Avoid incurring new debts. If you have just lost your job, then you need to be all the more careful with your spending. Some people may use their credit cards as replacement for cash but don’t forget that the high interest charges can add up to your debt problems later on. Taking out short-term loans to cover for your daily expenses may not be a very smart idea as these loans usually come with very high interest rates and fees.
- Find alternative ways to earn. Do you have a special skill that you can share? For instance, do you know how to play the guitar, piano or other musical instruments? If yes, why not offer tutorial lessons to people who want to learn a musical instrument? Do you have knowledge in photography? Perhaps you can take photos and sell them online for extra money? Or maybe you can offer photography lessons in person and online. Be open to money-making opportunities that you can do while looking for a more stable employment.
Sometimes you can see the writing on the wall, before you get your pink slip call your credit card and tell them you want credit card insurance. They won’t give it to you if you are already unemployed! Credit card insurance will cover the minimum payment for a certain amount of time (varies with each card). Keep in mind it only pays the minimum due on the charges made before the insurance was activated. If you continue to use the card after asking for assistance those charges will not be covered. You will be responsible for making the payments on that portion of the credit card. So its best that once you request assistance from the credit card company that you put the card away and not use it again until you can start making the payments. One draw back to this insurance is that if you are fired, you will not be covered.
[GOOD READ: Smart Ways to Save $100 a Month and More ]
About the Author
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of NHBS Inc such as their continuous effort in giving out Free Credit Repair Guide and Credit Repair Ebook. NHBS also offer affordable debt consolidation and a list of recommended Credit Cards for Bad Credit to help you manage your financial obligations.