Job Lay-offs
The economic forecast certainly isn't encouraging: unemployment remains high, the housing market is still in turmoil, and the job market is tightening. Companies are doing everything possible to improve their bottom lines and this translates to laying off workers, reducing employees' hours and in some cases, completely closing down.
If you have recently lost your job, you already know the stress and feeling of helplessness that comes with this situation. But there are some things you can do to help you get through this tough period.
Contact your company's personnel department. It's important to know how long you will have health insurance benefits or if a COBRA plan will be available to you. Find out if you will receive a severance package and if so, the specific details. Be sure you know when and how to apply for unemployment benefits. Many times you will need a letter from your employer explaining the circumstances of your job loss.
Get in touch with all of your creditors. It can be very tempting to just ignore them all, but it's extremely important to let them know as soon as possible about your current situation. Most will be willing to work with you and set up a reduced payment schedule until you are able to find a new job. The sooner you contact them, the more agreeable they should be.
- Mortgage- Ask your mortgage servicer about a loan modification. This can permanently change the terms of your original mortgage and give you a better interest rate and lower monthly payments. Learn about the President's plan for homeowners at www.makinghomeaffordable.gov
- Rent- Contact your landlord and ask for a rate reduction, if possible. Consider renting a smaller apartment or house. Look into getting a roommate. This automatically cuts your rent and utilities in half.
- Credit Cards- At least try to make the minimum payments on your outstanding debt. Contact your credit card companies and learn if they offer a hardship program. You may get a lower interest rate and have smaller payments due for a certain amount of time.
- Auto Loans- If you have a car loan, find out what refinancing options are available to you. You may be able to extend the terms of your loan in order to reduce the monthly payment amount. If you don't need your vehicle, consider selling it. Make sure that you can get at least enough cash to pay off the loan amount.
- Auto Insurance- Get in touch with your insurance representative and ask about raising your deductible. This will normally result in a lower premium amount. Also consider combining policies. Many companies offer discounts for multiple policies, such as home, life, and automobile.
- Gas and Electric- Contact your utility companies and find out about energy assistance programs. See if emergency funds are available.
- Telephone- If you primarily use your cell phone, consider cancelling your landline. Try to bundle as many services as possible to cut costs.
It's important to maintain your health insurance coverage. If your spouse or partner has coverage, find out if you can be covered under that plan. Also, check to see if you can keep your previous coverage under COBRA. This is a federal program which allows unemployed workers to keep their group health insurance usually up to 18 months. You do have to pay the entire premium but group rates are generally lower than individual ones. If you have little or no income to pay for private health insurance, Medicaid may be a possibility.
