How to Deal with Debt when Made Redundant

by khalid on 28/08/2012 · 0 comments

Because of economic volatility, many companies may take the hardest decisions and those may include making some staff redundant. You may have to expect for the worse because anyone can be displaced at the workplace. Your employer may not want to let you go, but if it is left with no choice, it has to terminate your employment.
Job loss is a common misfortune these days. If you experience it, do not take it too seriously. Move on and find another job. For sure, there are many other job opportunities that will open up to accommodate such a talented professional like you.

Redundant

However, for the meantime, you have to live within your means. It may take some time, maybe a few weeks or a few months, before you finally find a new or even better employment. But what happens to your financial obligations during that time? It helps if you have saved for the rainy days. But even if you have savings to spend, it is still better to deal with your debts more appropriately and effectively. Here are some tips.

Immediately get in touch with your lender and credit card issuer to ask them any option about interest-only payments. You can always ask them to temporarily halt collecting dues from you while you are dealing with a recent job loss. Most loan providers and credit card firms will be considerate enough because they will understand that you lost your income. Just promise them that you will immediately resume to normal payments when you get a new job.

If your request for an interest-only payment is declined, try to negotiate for a reduction in debt or credit card payment. This may be possible by spreading the debt over a longer term. Just be reminded that this option is quite costly because as you know, the longer debts stay, the more expensive they get because of the interest payments.

For your mortgage, ask the home lender for a possible forbearance agreement. The deal will allow you to only shoulder a fraction of the monthly mortgage payment for the meantime or until you get another job. Don’t worry because most mortgage providers will be willing to negotiate payments to avoid foreclosures.

Ask your utility providers like wireless phone services, cable operators, and Internet providing firms if they can give you a budget program. If you are currently delayed on your dues, you may inform them about the situation and commit to make payments when you get another employment.

Consider debt counseling. A debt counseling agency may not just guide you how to deal with debts while out of job; it may also negotiate on your behalf for reduced loan payments, filing of bankruptcy, or debt settlement.

Once you get a new job, do not forget to immediately repair your credit. You may not be able to immediately pay off all your dues but you can coordinate with your creditors for staggered or planned payment schedules.
Andrew has been blogging about personal finance for several years specializing in debt reliefand budgeting. Over the years, Andrew has published numerous articles in prominent blogs.

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