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Managing Your Debt to Avoid Bankruptcy After Losing Your Job

Posted on in Arlington Heights Bankruptcy Lawyer

Managing Your Debt to Avoid Bankruptcy After Losing Your Job

In a few earlier blog posts, we discussed Toys R Us' struggle to stay afloat in today's increasingly online marketplace and its subsequent decision to file for bankruptcy. Now, the company is closing all of its 800 stores in the United States, leaving approximately 31,000 employees without jobs.

These employees will not receive severance packages due to federal bankruptcy laws. Although they will receive two months' pay and benefits as required by federal law, many employees will be facing financial difficulty as they seek new employment. When you lose your job, it can be easy to panic about your financial future, especially if you have debts to repay. Use the following guidelines to make the transition as easy as possible for yourself.

Reprioritize and Make a Budget

Create a budget that will ensure that you can continue to make your important payments, like your mortgage or rent payments. Even if you continue to receive wages after your company closes, creating a budget while you still have income will make it less stressful for you to live without an income if you do not secure a new job before your compensation period ends.

Learn About Credit Card Forbearance Programs

If you anticipate your job loss making it difficult for you to make your credit card payments, contact your credit card companies and ask about their forbearance programs. Many issuers have programs in place to help customers manage their debt, and yours might have this type of program. Through it, you might be able to pay a lower monthly amount or delay your payment deadlines to give yourself time to put a budget together and come up with the money you need to repay your debt.

Apply for Unemployment Compensation

Visit the Illinois Department of Employment Security's website to determine if you qualify for unemployment insurance. If so, you can open a claim for unemployment compensation and receive a portion of your wages on a regular basis while you search for your next job.

Find Ways to Generate Income Until You Land Your Next Job

In the meantime, consider finding ways to generate a little bit of extra income to help you continue paying down your debt. You could take on freelance assignments in your field or if provide services, like lawncare or babysitting, to friends and loved ones who need them. Other ways to earn a side income include walking dogs, driving for a rideshare like Uber, and selling items you no longer want or need online.

Work with an Experienced Palatine Bankruptcy Attorney

Losing a job can change your life. If losing your job means you cannot repay your debt, do not panic; you have options. One of these options could be bankruptcy, especially if you were only able to make minimum payments while you were employed. To learn more about filing for bankruptcy, contact our team of experienced bankruptcy lawyers at Newland & Newland, LLP today to set up your initial consultation in our office. We serve clients in the Arlington Heights, Palatine, Rolling Meadows, Libertyville, Mundelein, Buffalo Grove, Schaumburg, Elk Grove, and Itasca areas.

(image courtesy of Madison Kaminski)

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