8 Great Debt Management Tips For The Unemployed

Trisha was devastated. Before she called me. She had just been laid off from her job. She was deep in debt. She was making her payments on-time, but now that she was without a job Trisha didn’t know what to do.

I was able to calm Trisha down and give her some tips to help her out while she searched for another job. Today, I’ll tell you what I suggested to Trisha.

1. Check your Government Credit Report at http://www.Annual Credit Report.com. It’s free (once every 12 months). 79% of Credit Reports have ‘Clerical Errors’ on them. Over 25% of Borrowers have had negative yet inaccurate information prevent them from obtaining much needed Credit.

“Negative and inaccurate information on your Credit Report, should be removed or corrected asap”

One clerical error on your Credit Score can make a BIG difference. Check your Government Credit Report for errors at AnnualCreditReport.com.

2. Keep your Unemployed Status a secret. Creditors can not afford to feel sorry for Debtors. Don’t tell your Creditors (or anyone you do business with ) that you’ve lost your Job.

3. Know your Emergency Options regarding your 401k. True confession. When I lost my radio job, I took a loan from my 401k to buy a used car. Borrowing from my own 401k made me the Creditor and the pay off was painlessly low. There are many 401k options (depending on the plan). Call your 401k provider and ask about your Emergency Options.

4. Refinance whatever you can for a lower fixed rate. There is almost nothing worse than being Unemployed and your Interest Rates for your loans sky-rocket. If you have a ‘Variable Rate Loan” or your rate is too high, look at refinancing . Beware though…a re-finance may not be easy. You’ll have to keep at it. Shop around, learn your options.

5. Prioritize your finances.Like Dr. Stephen Covey, Author of, 7 Habits of Highly Effective People said, “put 1st things 1st. Pay all of your bills, as needed. But your family’s priorities and utilities; lights, gas, food, and shelter,are much bigger priorities. I would prioritize from biggest to smallest – necessary to unnecessary.

6. Close Credit Accounts only if necessary. Normally, I wouldn’t suggest that you close any Credit Lines if you can responsibly manage them. But we are NOT in NORMAL times. It’s much better for your Credit Report to state, “close at borrowers request” than, “closed at the Creditors request”.

7. Be Flexible with your expectations. You may not find the kind of job at the pay you’re used to. You may have to change careers all together. This is the time to become open to other opportunities. This may be a time to start your own business. The choice is yours.

8.Be kind to your mind. You may find yourself feeling aggravated, depressed, angry and shocked at the lack of common courtesy in the Job market. Now is not the time to be hard on yourself. Instead, use every interaction as a learning experience. Make it a game, have fun! Remember, bills are just business, not your life.

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DEBT WARRIORS™ are not Attorneys. The information on this blog, should not be considered legal advice.