If you feel like you’re able to keep up with your bills, but honestly live paycheck to paycheck, you aren’t alone. Many people find it difficult or impossible to make any progress toward growing an emergency fund, so when something unexpected comes up, be it a job loss or hospital bill, they’re forced to use credit cards. After enough of these challenging circumstances, it’s easy to find yourself in over your head. While bankruptcy may be your best bet, there are things you can do to get things under control while preserving your credit.
If you’ve lost your job, there are several things you’ll need to do. First, prepare for some “damage control” by looking at your budget and expenses. Are there any luxuries that you need to cut out? Do you eat out a lot or have memberships/subscriptions that can be ended? Try to cut your spending to only the things you truly need (at least for this time period.) You may be able to negotiate with your cell phone or internet providers to reduce your monthly bills. If you have loans or credit cards, contact your creditors to see if you can work out a payment plan to reduce or defer your payments. It’s always best to at least contact the company before you miss a payment, so that you can show you’ve been proactive.
As you look at your budget, you’ll also need to think about benefits you may be losing, such as health insurance. Your employer may offer you COBRA, which extends your current coverage, but this can be pretty pricey. Take the opportunity to look at other options for private insurance; if your income is low enough, you may end up qualifying for state medical insurance or other forms of financial assistance.
To bring in some income while you’re job searching, file for unemployment benefits right away. The process can take a while, and the benefits will not pay 100% of your wages, but it will help as you get over this hump. The unemployment office may also provide employment assistance such as job search or resume workshops, so be sure to take advantage of any help they offer. Update your LinkedIn and other social media accounts to show that you’re looking for work, and make sure all of your friends, family, and acquaintances know you’re job searching. You never know what connections you might make. If your job loss was due to a change in your field and there aren’t many jobs available, you may consider a career change. Before making any big changes, check https://www.careeronestop.org/ to do some research and explore potential options. Maybe this job loss will lead you in a whole new direction that will end up being for the better.
Dealing with a job loss is never easy, regardless of the circumstances. But if your period of unemployment drags on and on, the stress can really start to add up. If things get to the point where you can no longer keep up with bills or make minimum payments on debt, bankruptcy might be a viable solution for you. Don’t feel ashamed; many people have been in your shoes and have found relief through bankruptcy. If you’re uncertain what to do next, give me a call so that we can discuss your options.