How to manage through a no-income crisis
Q:
I injured myself doing odd jobs a few months ago and it’s taking a long time to recover. I’ve worked for money and somehow for myself, so I don’t have insurance for income replacement. I have a regular part-time job, but I don’t have any extended benefits and I can’t do this job right now. I have no more savings and no family members to help me. I’ve applied for medical EI but even if I get it it won’t be much because that’s from my part-time job. Luckily my credit cards haven’t been blocked yet and I should be able to get a cash advance for another month or two of rent. I can’t pay other bills right now. What can I do? ~Landon
A:
After the last few years and the current one
high cost of living
, You are in a very difficult situation and I am sorry that you are going through this difficult situation alone. Losing your income is bad enough, but trying to heal from your injuries at the same time makes it that much worse.
Set your priorities
When you’re in a really tight financial position, it’s important to focus on what will help you meet your basic needs first. This will keep you as healthy and safe as possible so you have the energy to get through your rehabilitation and get back on track.
When considering your priorities, it has nothing to do with which collection agency sent you the last letter. While collection agencies may not readily admit it, they know that paying off their debt is not a priority when someone is injured and has no income. However, the collectors can only work with the information they have. Many consumers shy away from answering calls and letters from collection agencies. A better strategy is
effective communication with collection agencies
so that your stressful situation does not unintentionally worsen.
3 ways to help family or friends in financial difficulties
Priorities when struggling with no income include:
Your rent or mortgage
– keep the roof over your head and leave the heating and lights on. Contact your lender to see if your mortgage payments can be temporarily reduced
or if you qualify for another
mortgage relief
.
Look at your utility bills to see which ones can be reduced or deferred for the time being.
groceries and medical necessities
– You must maintain your health and heal your injuries. Look for ways
save at the supermarket
and with like you
Manage your cooking
. If necessary, ask friends or neighbors to help prepare meals. Visit the board
local place of worship,
or other community service in your area if you don’t have enough income to meet your nutritional and medical needs.
mobile phone
– You need a reliable method of communication. However, most cell phone bills include extras that can be scaled back when money is tight. Contact your wireless service provider to see what they can do for you during this difficult time.
transport
– You have to come to important appointments, especially if you are in physical rehabilitation or looking for work. ridesharing, taxis,
ask a friend for a ride
d even the bus is a good option if driving yourself is not possible or too expensive.
How to pay off debt without money
What to do when meeting basic needs is a challenge?
If meeting your basic needs is a challenge right now, whether you are recovering or unemployed for some other reason, it is important that you make your situation known to all creditors so they can extend it
hardship programs
they have to go to you. If they don’t know your situation, chances are they’ll start collecting if you default.
Any money you have, take steps to keep it safe.
Open a bank account
at a bank or credit union where you do not owe any money. Deposit the money you have into this new account and also use this account for direct deposits. While switching banks can be a bit of work, it protects you from settlements.
Set-offs occur when you owe money to a financial institution (loan or credit card) and default on payments to the same institution. They can use any money you have in your accounts to pay off these debts without notifying you first. If you suddenly receive a deposit, e.g. B. an income tax refund or a birthday present, this money is also at risk.
If you have assets that you could sell, now may be the time. Set aside the money you earn in a separate savings account so you have a cushion when you need it. If an item you are selling has a loan attached, try to sell the item for at least the amount you owe on it. This way, the loan can be repaid and you have one less payment to worry about.
If at all possible
generate a small income
, without jeopardizing your recovery, see what you can do. Try collecting recyclables from friends and neighbors to return for a refund, or charge a little for someone to park in your yard if they’re short on parking in their lot. Be as creative as you can while staying within what is allowed in your community.
There are more work-from-home options than ever before. Investigate if any of them are something you could do as well.
The bottom line is what to do if you have no income
If money’s really tight and you’re only making ends meet by borrowing, stick to spending only for the bare minimum so you don’t get into more debt than you absolutely have to. And try not to worry about your credit score. It will go down, but once you’re back on your feet, you can also take steps to help it recover. Then, as hard as it may be, tell your friends and family what you’re going through. Nobody likes to see their loved ones fight, and things don’t usually feel so grim when we’re making ends meet with a little help from our friends. Even if they can’t support you with cash, stopping by with a meal or offering you a ride will do you great good during this difficult time.
Related reading:
No income, low income – now what?
Borrow money from friends or family
Is it a good idea to co-sign a loan for someone?
Scott Hannah is President of the Credit Counseling Society, a non-profit organization. For more information on managing your money or debt, contact Scott by
E-mail
check over
nomoredebts.org
or call 1-888-527-8999.
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