Did you recently lose your job and you’re having trouble making ends meet? If so, you’re probably also facing a mountain of debt that keeps piling up. When you have limited funds and no steady paycheck coming in, you need to pick and choose what bills are the main priorities. In the meantime, you’ll need to inch your way out of debt in order to prevent a financial disaster from occurring. Here are just a few tips on how you can get out of debt after a job loss.
Gaining Fast Cash Flow
With limited cash flow coming in, you’ll need some fast cash in order to sustain your lifestyle until your unemployment or first paycheck from a new job comes in. Aside of picking up a side job, here are a few fast ways to obtaining some cash on hand:
- *Having a rummage or garage sale
- *Pawning off valuable jewelry or antiques
- *Liquidating stocks, bonds and savings accounts
Another option is a personal cash loan, similar to a payday advance. These types of monthly installment loans allow you to gain access to money right away and pay it back in small, affordable payments. You will skip the requirements by your local bank or lender, and not have to go through the harsh time-consuming underwriting process. Qualifying is simple and there is often no credit check. So even if your credit has been shaky in the past, you’ll likely get rapid approval. You will have to show some type of verifiable income, however, so this option may need to wait until you find a new job.
Consolidating High-Interest-Rate Credit Cards
One of the very first things you need to consider if you’re facing a lot of debt that you can’t immediately repay is to make sure you pay the most important bills first. Of course, this starts with food, gas, car note, your house payment and your main utility bills. From there, any money left over should go to cover active credit card bills. If you’ve had troubled credit in the past, you may have a high interest rate on some or all of your credit cards. If possible, see about consolidating all of your credit card debt into one payment in order to pay the balance off sooner. This may also give you more time to make your initial minimum payment as well. Overall, your payments should be lower and you’ll be able to pay off the entire balance more quickly.
Refinance Your Home Mortgage
Depending on your credit and the equity in your home, you may be able to remortgage to save your home and your financial situation. Keep in mind that you’ll need some form of income to be able to do this. If you have an upcoming unemployment check coming, you should be able to qualify. Remortgaging can combine all of your debt and possibly lower your payment or make all of your debt more affordable, with just one monthly payment. You’ll have to have a home appraisal and a solid FICO score in order for this to benefit you. If you can’t do it, ask your mortgage holder about a deferment of payments or a moratorium, which will possibly allow you to pay only interest on your loan for a specified period of time.
Practicing Everyday Savings
With a job loss, you’ll need to find ways to cut corners with your everyday spending. This includes:
- *Shop using coupons and discount savings cards.
- *Cut back on expensive groceries and going out to eat frequently.
- *Slash your cable bill by switching to free entertainment options.
- *Utilize free Wi-Fi at local establishments, including your library.
- *Reduce spending by not going out as much and staying in.
The worst thing you can do is not pay your bills without an explanation. If you truly can’t pay your car or house payment, call your lender right away. They may be able to lower your interest rate through a lower minimum payment, extend your loan terms or offer a one-time option to skip one or two payments. Never ignore a creditor or debt collector. The results could include wage garnishment, a bank or property levy as well as repossession of personal property.
There are several ways to make your dollar stretch in times of need. Working through each issue as it comes up is the best way to deal with it in a financially healthy way.