There may come a point when you reach a financial crisis. This may be due to an injury that keeps you from working or from unexpected medical bills. It can be difficult to deal with the situations that cause you financial distress on an emotional level, without getting into the financial problems. If you find yourself in a situation where you just can’t seem to pay the money you owe, there are several steps that you should take.
First you need to sit down and assess the situation. Is the situation permanent or is it temporary? You should compile a list of who you owe money to, and how much you owe to each individual. You should also look at what your family needs in order to sustain itself—food, shelter, lights, and heat. Then look at what money you have coming in every month.
Next you need to plan. You can set up a tight budget of your daily basic needs. After that you should see how much money you have left over. If you do not have any, is there any way that you can increase your income? Could one of you pick up a part time job? Could you work from home over the Internet if you are disabled? Can you sell some items to help you pay your bills?
After you have done that you should contact each of your creditors. Most places are willing to set up payment plans with you, once you explain the situation. You should have a plan in place when you talk to them. Student loans can be put into forbearance, and you may consider asking your credit cards to lower their interest and minimum payment requirements for a short time. Creditors appreciate it when you are up front and honest.
The best thing that you can be is proactive. As you work towards a solution, you should be able to meet all of your obligations eventually. It is not always easy to do so, but through hard work and effort it can be accomplished. Once you have gotten out of the situation, begin to plan ahead. You can do this by having adequate insurance coverage, and money saved up to cover medical expenses. You can also set up a fund to help cover emergency expenses, such as legal fees. Additionally, if you are financially strapped, you may consider seeking legal counsel that works pro bono or at reduced rates for those in need.
Related Articles:
Are You Considering Cutting Health Insurance to Save Money?
Five Steps to Organizing Your Finances