Twenty-two percent of bankruptcy filings are linked to job loss
Even when you dislike your job, it’s rare that you’re overjoyed by the announcement that your employment is ending. And in some situations, it can feel downright devastating. So much of our lives can be wrapped up in our jobs, as we spend a good chunk of our time there each week. Moreover, your initial thought after getting the news might be, “Oh shoot, how can I ever pay my bills? Will I have to file for bankruptcy?”
If you are faced with the loss of your job, here are several tips that will help you navigate the financial waters:
Cut expenses to the bare minimum
You might be thinking, “I don’t have much to cut.” But you might find there’s more than you think. For example, small changes such as cancelling cable TV, getting a better rate on insurance, switching cell phone providers and cutting back on the “luxury items” – gym memberships, coffee and others – are a good start. You may not balance your budget by cutting expenses alone; after all, you just lost an income. But it will make things more manageable in the meantime.
Seek hardship programs with your lender
Do you own a home? If so, work with your lender from the start. Programs such as forbearance, in which your monthly mortgage payment may be temporarily suspended or reduced for a specific amount of time, can be a lifesaver after job loss. Loan modification is another option that may change the terms of the loan – such as interest rate or time allowed for repayment – to ease your monthly obligation.
Take inventory of all other loan obligations
Do you have a vehicle loan, student loan or other financial obligations? If so, lenders for these assets may have forbearance or loan modification programs as well. Arrange for these quickly before you start being late on payments.
Balancing the budget
After seeking the loan modifications that you need and reducing expenses, you may still find you’re in the red. And that’s OK, because remember, job loss is temporary. In the meantime, it’s wise to take inventory of your assets and identify anything that you can sell to balance the budget in the short term.
Seek the advice of a bankruptcy law firm
A job loss might feel devastating as you scramble to meet financial obligations, but many people find that it’s a gift. They find the courage to try new interests and job opportunities they may have passed over in previous years because they were afraid to leave a steady paycheck. Or they may be spurred into self-employment and starting that business they always dreamed about. Either way, taking small steps forward is the best way to navigate this time in your life.
If you are faced with the loss of your job, struggling with debt and have questions, please contact us — we can help. Call 914-946-2889 today for a free consultation.
The post Tips for Navigating Job Loss and Avoiding Bankruptcy appeared first on Penachio Malara, LLP - Bankruptcy Lawyers.
