What Should You Do If You’re Unemployed and in Debt?
You’re not alone in asking this question. It’s good to hear that you want to be proactive and address some of your challenges. You are like a lot of people who can’t pay their credit cards because they are unemployed. The good news is if you are unemployed and in debt, you still have options. While it may seem hopeless, that’s not the case. You can take charge of your financial future and manage your current situation with some easy techniques.
Unemployed and Stressed About Bills? This Strategy Can Help
As states begin to cut unemployment benefits, people need to know what to do about their finances. In this ask the expert video, Consolidated Credit’s president Gary Herman explains what you can do to get ahead of those bills that are giving you stress.
I frequently get asked, how to handle credit card debt when you’re unemployed.
And, while it’s a really good question, the start to any financial decision always begins with looking at your personal financial statements.
The first thing you want to look at is your budget.
Prioritize your expenses, from your fixed expenses or the things that can be turned off or taken away if you don’t make the payment and end with your variable expenses and also your debts.
After you subtract your expenses from your income, it will give you an idea of how much money you’ve got left over to solve whatever problem you have.
In this case the question is how do you pay off your credit card bills when you’ve got less income due to unemployment. You also want to look at your balance sheet.
How much money do you have in the bank?
Do you have other assets to draw on? To sell.
This will also give you an idea what you can use to help pay down your debts.
Step two would be to prioritize your debts
High interest rate to low interest rate
Big balances to low balances
Put a priority on keeping credit card bills that are about to fall past due from falling past due. Once they fall past due, you’re getting bigger charges, higher interest rates.
If you’re having trouble with any of these bills, I recommend calling the credit card companies, letting them know you’re having difficulties, again, do the best you can from keeping accounts falling past due.
If you’ve got multiple accounts that are about to fall past due, or falling past due, the best thing you can do is call a credit counselor, they can give you advice on what your options are and may even be able to put you on programs that can get you out of debt faster.