Are You Unemployed and Can’t Pay All of Your Bills?

by Joni Douglas Are you unemployed and can’t pay all of your bills? As so many people have recently found out, unemployment may not pay all of your bills. How do you decide which bills to pay and which ones not too? Should you pay the same bills next month or alternate payments thinking that some money is better than none? Hopefully we will provide you with some answers that may help you determine which course of action is best for you. The Bills that Absolutely Need to be Paid Your House First and foremost, if you want to keep your home, keep your house payment up to date. Normally, your bank or mortgage company has a 10-day grace period policy, in which you can make your payment without penalty. Before relying on this extended period, you should check your policy or call your bank or mortgage company to confirm that. As long as your payment is made within the 10 day grace period, there is no mark on your credit report. There may be some who folks who simply cannot afford the payments any longer. For those whose income levels have dropped so low that the house payment is beyond your means, your first call should be to the bank or mortgage company to ask about a loan modification. This is not a refinancing so you need not be concerned about qualifying for the loan by your credit worthiness. A loan modification, simply put, is a rewrite of your existing loan with easier terms. This loan rewrite should not incur those high fees that accompany a refinance either. A word of caution, a loan modification loan can be restricted to only those who are currently employed but you will need to check with your bank or mortgage company to find out the particulars as these restrictions can vary from company to company and state to state. For those that rent or lease their homes, obviously, if you are not prepared to move out, you need to keep your rent payment current. Most leasing agents are unwilling to work out any deals during a period of unemployment and many people are reluctant to inform their leasing agent about their change in work status. This is a decision that only you can determine. Your Vehicles If you owe money on your vehicle, you need to understand that your vehicles are on what is called a secured loan. That means if you default on the loan, just like with your house, the finance company can and probably will, come and take it away. You have given them the right to do so in the fine print of your sales contract. In most states this means anywhere the car is, not just on your own property. Most of need our cars so this is another bill that rates as very important to continue the payments on. Especially for the unemployed, you need to be mobile to look for work and be readily available when the call for an interview comes in. Your Utilities You and your family need heat, electricity, water and all of the other utilities that normally fall into this category. Granted, for those at high risk of turn off, there may be help available for you but you need to call and ask for that help. Even you r phone falls into this category simply because, you cannot get a call back with a phone. This may not include the newest and most fancy cell phone with all the bells and whistles, but only you can decide that. Your Insurance This one is one of those bills that many people feel that they can skimp on. Do not fall for that logic. The unexpected still happens and when you are unemployed, you are more vulnerable because the money just isn’t there for repairs. Your Food You and your family still need to eat. Budget your grocery money as best as you can. Skimping on meals is nothing new to many of the unemployed but you must eat and stay healthy. Check for grocery services in your area. Look for food banks if you can and check with local churches, they often have weekly food drives. A great resource for weekly groceries is Angel Food Ministries, look them up online. This list may not be complete for everyone, but it covers the most general aspects of life. You may have others that I have not listed, then by all means, add them to your list of ‘must pay’ bills. Some of you will have monthly doctor bills that need to be kept up to date, in which case, I would call them and let them know your difficulties and try to work out a lower payment if possible. The Bills you Pay Last This may be controversial but I am telling you to pay your credit cards last. Only you know how much money you have left after you have taken care of the essentials and only you can decide what to pay and what not to pay. Your credit cards are unsecured loans. That means if the bill isn’t paid, they cannot come and take anything away from you. There is no collateral for these loan s. Just a small disclaimer here……… If you have other loans, secured loans, with the same financial institution, you better check the fine print on your contract for any cross collateral wording. For example, if you have a personal unsecured loan through your local bank that you are not making payments on and you have a car loan through that same bank that you are making payments on, depending on the wording in your contract and the laws of your state, they may still be able to repossess your car even though your car payments are up to date. Let’s be clear though, if you stop making your credit card payments, you have embarked on a difficult journey. The credit card companies will call you daily. There are rules that they must abide by. For further information about creditors calling, please read –When Creditors Call. Credit Card companies may file judgments against you and at that point the rules change. You will need to know what your rights are and what you can do to circumvent them from seizing your money and any other assets that you may have.