Job Loss and Bankruptcy

Many Americans live paycheck to paycheck, but manage to cover their bills and expenses. But when an unexpected job loss happens, it can be jarring and challenging to know how to handle things. If you’ve already been struggling to keep up with payments and have been considering bankruptcy, a lay off or job loss can be the deciding factor. However, losing your job doesn’t make bankruptcy a necessity. There are many things you can do to get through this difficult time with your credit intact.

Proactive Steps

Your first step should be to take a close look at your budget and try to work with your new income. Are there some luxuries you can cut out? Can you negotiate with your cable or cell phone companies for better rates? If you owe debt payments, can you work with your creditors for deferment or reduced payments? It’s best to be proactive and make these changes before you begin falling behind. It’s also important to check your credit report to ensure it’s accurate. Many employers will pull a credit report and use it as they evaluate you as a potential employee.

You’ll also want to apply for unemployment benefits. This not only will give you some income as you job search, but the unemployment office may also have employment assistance available, such as resume and interview workshops. If you’re leaving your employer on good terms, they also may be willing to connect you with other employers or help with your job search. Update your LinkedIn page to show you’re looking for work, and consider joining other professional organizations in your field that could help you make networking connections. Tell everyone you know and meet that you’re looking for work; you never know who may be able to help. This might be time for you to consider a career change that you hadn’t previously considered. Check out to look at other options you may be able to transition to, with or without additional training.

In addition to job searching, you may also be concerned about health care. Think about what you’ll need to do to continue or change your health insurance. Your employer may offer COBRA coverage for a period of time, but this can be quite expensive. Do some shopping around to see if you can find an affordable plan or even qualify for some kind of assistance.


Bankruptcy Can Help

Being unemployed can be incredibly stressful, especially if it takes a while to find new employment. If your budget was already tight, you may start falling behind on bills, and before you know it, you’re in over your head. If this happens to you, don’t panic. Many people who experience a job loss find relief through bankruptcy. This could be just the new start you need and the best way to get back on your feet. If your debt is starting to get out of control, give me a call so that we can discuss options.