What to Do When You Lose Your Job & Can't Pay Your Bills

You found out today you don't have a job anymore. Whether you were laid off, terminated or the company you represented went belly up, you must react quickly and decisively. You have bills to pay and no money coming in. Don't panic and follow these steps to get your career restarted and make ends meet until you start making the money you were used to.

File for Unemployment

If you were laid off for reasons beyond your control, contact your local unemployment office immediately and file for unemployment. The sooner you get the ball rolling in that department, the more quickly you'll receive the funds. You'll receive a fraction of your usual income, but at least you will have some money to buy the basic necessities and buy you time until you get a new job.

Begin Your Job Search Immediately

Don't wait to hit the streets to find employment. Understand that even part-time work outside your field of expertise is better than no job at this point. With the ease of job searching on the Internet, get your resume and cover letter created and start uploading it online (see Resources). Most cities also have employment agencies, so pay them a visit. Fill out the paperwork and get some exposure that you are available for hire.

Contact your Creditors

For the bills you know you won't be able to pay for a while, contact the organization and let them know ahead of time that you won't be able to meet your obligation. This is very important; being a good communicator to your debtors can save your credit long-term. Many companies also offer hardship programs that will lower your interest rate and monthly payments for 12 months until you can resume paying what you owe. Don't wait until they start ringing you five times a day. Then it may be too late to save your credit.

Assess Your Situation

Step back and take a helicopter view of your situation. List your upcoming bills in order of importance and take a look at what kind of cash on hand you have. List all your assets, such as retirement accounts, cash value life insurance, CDs and other valuables. Consider lowering your lifestyle until the money is coming in again. Cancel the satellite TV and Internet (use your local library's online computers) and postpone those vacation plans. Make a game plan and stick to it.

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