Business Bankruptcy in Canada is primarily governed by the Bankruptcy and Insolvency Act (BIA), a…
Unemployed and think you can’t pay your credit cards? Don’t push the panic button yet. You’ll need your energy to figure out a plan.
There are definitely steps you can take to gain more control over the situation.
Because the last thing you need is for bills to go unpaid.
Your potential employer could see your credit report. And you will look like a person who can’t pay your bills.
So, here’s a way to get a handle on the situation:
Read your settlement.
In your final days of work, carefully read anything you sign. Pay attention to the terms of your agreement.
The money you receive will depend on how long you’ve been an employee. Also on where you live.
Make a note of the amount, when it begins and ends, and whether your EI benefits are affected.
Get ready to job hunt.
Update your resume. Refresh your LinkedIn profile. If your company provides outplacement services, use them. Your province may offer these services, as well.
And make sure you let friends and family know you are looking. This is a very common way that jobs are filled and the people you know are happy to help.
Sell stuff you don’t need.
If you’re driving a classic ‘64 Mustang or own a motorcycle you haven’t fired up in years, now’s the time to sell.
A gym membership you don’t use? A forgotten drawer full of electronic gadgets? You’d be surprised what people buy.
Look around your house, your garage. It’s easy to sell things on eBay or Kijiji.
Add up your bills.
Figure out your balances, payment amounts, and when your bills are due. Then put together a payment plan.
Prioritize your bills in case things get rough. House, car, utilities, taxes…you have to pay them.
Call your creditors and mortgage company.
Ask if you have payment insurance. That’s insurance that makes your payments if you are unemployed.
Even if you think you don’t, ask. It’s not unusual to buy this type of insurance without realizing it.
Ask for lower interest rates.
Ask your credit card companies to reduce the interest rate on your debt. They actually want to keep you. The worst you can hear is no.
Tighten up your budget.
Cut your budget. Make every penny count. When you can, put extra money on your smallest remaining credit card bill. And speaking of credit cards? Stop using them. Pay for everything in cash. You’ll spend less.
Pay off your little bills.
Take your lump sum severance and pay off a couple of small bills. Before you do, make sure you have enough budgeted for the long haul.
This isn’t a strategy for the squeamish, but it could save you hundreds in interest charges.
Make timely payments.
Continue to make timely payments on all other bills. The last thing you need is late fees.
Being unemployed is not easy. But you can relax easier with a plan. If you have insufficient income and can’t pay your bills, don’t wait for debt collectors to come calling.
Contact a Licensed Insolvency Trustee to evaluate your options.
For More Information call 519.310.JOHN (5646)