Handling Debt After Job Loss

You work hard, but still the worst happens – you lose your job.  It’s bound to be a shock, and knowing what to do may be overwhelming as bills pile up and you begin to be harassed by creditors demanding to be paid.

According to an August 2017 Bureau of Labor Statistics unemployment duration report, 30.9% of people find a job in fewer than five weeks; 29.3% find a job in five to 14 weeks; and 13.9% find work in 15-26 weeks.  The longer you are unemployed, the worse things become.  After six months you are considered as long-term unemployed, and if you have been getting unemployment benefits they usually run out.  It’s a frightening situation.

Unemployment is a big problem, but there are options that can help.  The skilled and seasoned Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand that even the most well-intentioned and hard-working people can find themselves in a financial hole after losing a job.  We offer a free consultation to evaluate your financial situation.  We can help by looking at your debts, your income, and your goals and coming up with a debt-relief plan that’s best for you.

Call one of our conveniently located office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) or email for your free consultation.

Steps to Help

While it is difficult to get through financial problems brought on by job loss, there are some prudent steps to take to strengthen your financial situation and keep up with bills.  These include:

1) Apply for unemployment benefits and government assistance.

Apply for jobless benefits if you qualify.  Other government assistance may include the Supplemental Nutrition Assistance Program (SNAP) and school lunches for your children.

2) Make a budget and prioritize your financial obligations.

With the money running low, you need to carefully decide which are the most important bills and pay these first.  Priority bills are the necessities of life, such as mortgage or rent, utilities and food.  You can take steps to lower these like raising the thermostat in the summer and lowering it in the winter, cooking at home instead of eating out, and even taking in a roommate if possible.

Additional priority payments include:

  • Health insurance. The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue your employer’s group coverage, but it is expensive. You may be able to find a less expensive plan through HealthCare.gov.
  • Car payments and auto insurance. You may be able to reduce your car payment by enrolling in your auto lender’s temporary hardship program.  If you have an expensive car, you may want to surrender it or trade it in for a less-expensive model.
  • Child support payments.
  • Income taxes.

3) Enroll in creditor hardship programs.

Check with your credit card, as they may be willing to work with you to avoid default by lowering or delaying payments entirely for a certain amount of time.  Mortgage lenders and auto lenders often have hardship programs as well, and you may qualify for a temporary suspension or reduction in student loan payments.

4) Cut back unnecessary expenses such as:

  • Phone, Cable, Subscriptions. You will need a cellphone, but cut back expensive plans with unlimited data. Get rid of your land-line phone if you still have one. Cut out cable TV and save on internet by applying for a low-income subsidy. Eliminate subscriptions for newspapers and magazines.
  • Services – Do lawn, house and repair work yourself.

5) Be careful with credit cards.

Pay your minimum payments if you can afford them, but be very careful about charging anything new. Avoid taking cash advances or signing up for financing plans, or using your credit cards for cash.

6) Do not withdraw money from a 401(k).

Retirement plans like 401(k)s and IRAs are exempt from bankruptcy, impose high penalties for withdrawal, and you will have to pay taxes on the money if you’re under 55.

7) Consider bankruptcy.

If your unemployment continues so long that you are not able to pay your necessary bills, bankruptcy may be your best option.  Bankruptcy can eliminate many debts and provide you a fresh start.  The loss of a job is one of the most common reasons people file bankruptcy, and you do not have to be employed to file.

The two major types of bankruptcy are Chapter 7 and Chapter 13.

  • Chapter 7Chapter 7 allows most, if not all, debts to be removed, providing a fresh start through full liquidation of all assets.
  • Chapter 13 –Chapter 13 may allow you to keep property, such as a mortgaged house, while you complete a three- to five-year payment plan to have debts forgiven.  You will be given a temporary reprieve and an opportunity to repay some of the accrued debt. A court-ordered repayment plan and potentially renegotiated terms will provide the chance to get out from under some of the worst debt and  emerge financially stronger.

Contact Us For Help

If you have lost your job and your debts have become overwhelming, we can provide a helping hand. The experienced and compassionate Ohio debt relief attorneys at Fesenmyer Cousino Weinzimmer offer a free consultation to evaluate your entire financial situation. We will examine your income, your debts and your goals and discuss the best fit for you.  We will make sure you are aware of all your options and help you decide on the path to a brighter future that makes sense in your individual case.  We understand what you are going through and will handle every phase of the process.

Delaying can only make your situation worse, so call the Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer today!  Call one of our conveniently located office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) or email for your free consultation so we can determine what debt relief solutions will work best for you.

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