Prioritize your Debts

For the unemployed, getting by will require a new, tightened budget.  Prioritize your bills and pay those most necessary for your family: food, utilities and shelter.

Failing to pay any of your debts can seriously affect your credit rating.  However, if you stop making your mortgage payments you could lose your house. Whenever possible, any income available after paying for food and utilities should be used to pay your monthly mortgage payments. If your employment income has been stopped or reduced, first consider eliminating or reducing your other expenses (such as dining out, entertainment, cable, or even telephone services). If that does not provide enough income, consider using other financial resources like stocks, savings accounts, or personal property that may have value like a boat or a second car. Take any responsible action that will save cash.

In addition to speaking with your lender, you may want to contact a nonprofit consumer credit counseling agency that specializes in providing help in restructuring credit payments. Credit counselors can often reduce your monthly bills by negotiating reduced payments or long-term payment plans with your creditors. The majority of credit counseling agencies provide their services free of charge or for a small monthly administrative fee tied to a repayment plan.  Beware of credit counseling agencies that offer counseling for a large upfront fee or donation.

For consumer debt advice contact the National Foundation for Credit Counseling at (800) 569-4287 or TDD: 1-800-877-8339. These agencies can provide financial counseling or refer you to a local credit counseling agency. 

When you call a consumer credit counseling agency, you will be asked to provide current information about your income and expenses.  Make sure you ask if the agency has a charge before you sign any documents!

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