Losing a job can leave individuals suddenly facing considerable stress – and a lot of questions. How will they pay bills? How will they support the family?
If individuals already have debt, these questions and worries only increase. Even though many employers offer a severance package to help individuals after a layoff, debt can quickly start piling up when families lose a source of income. So, how can individuals manage debt?
First, talk with creditors
Talking with creditors might seem even more stressful, but it is critical. A majority of creditors are often willing to negotiate a plan to:
- Reduce the payment amount for a period; and
- Lower the interest rate of payments.
Individuals can often negotiate lower payments with mortgage lenders, credit card companies and even student loan servicers.
Look into unemployment benefits
In certain cases, individuals who recently lost their jobs might qualify to receive unemployment benefits in New Mexico. These benefits provide financial support to individuals while they search for a new job. This gives families some leeway and finances to rely on while they manage debt.
Keep a tighter budget
Individuals should review their financial habits immediately after they lose their job. Even if the family already follows a healthy budget, it is important to cut down unnecessary payments.
Adhering to a strict budget might place even more stress on the family after the shock of unemployment, but it can help individuals save money and pay down debt in the long run.
Explore debt relief options
Dealing with debt can already be challenging, and the situation can become even more overwhelming in unemployment.
Thankfully, individuals have several options to obtain debt relief if their debt becomes unmanageable – including filing bankruptcy and creating a repayment plan. However, individuals must research their debt relief options carefully to:
- Find an option that meets their specific needs and protects their best interests; and
- Avoid offers that sound too good to be true, which are often scams.
Many people see bankruptcy and debt relief options as a last resort, but these options can often protect one’s financial future while eliminating or relieving the stress of debt in tough times.