Income Loss?

[scrapquitler]

I remember reading an article about what to pay and what not to pay in a crisis situation. As I recall, it said that the main things to pay in priority order are:
1. mortgage or rent
2. groceries
3. health insurance
4. car payment
Keep in mind that this isn't going to save your credit rating, but it will keep you with food and shelter.

down at the bottom is the credit card bills (they are unsecured) and anything at all optional...power/gas generally won't get turned off in the winter if you are behind, so you can probably buy yourself some time with those.

 

[maelstrom]

You need to keep paying your rent/mortgage and car payments, of course; those are first priority. You also need food and electricity and heat (if you live where it's cold right now... not having heat could cause other problems, like freezing your water pipes and them breaking and causing a whole lot of problems). Credit cards and medical bills are at the bottom of the list. Sure, they'll call and harass you, and your credit score will go down, but you'll still be able to live. They can't come and repossess your medical treatment or what you put on your credit card... but they can come and repossess your car, which is why you need to keep paying that.

 

[thefirebuilds]

last year i saw it coming so i started killing non essentials.

I cut off my television ( i get broadcast only on my 47" flat screen now )

i bought a geo metro that gets 53mpg and has been one of the best investments of my life, extremely easy to fix and the worst replacement I've had to do was a radiator. $100 and about 20 mins in the parking lot at work

I bought canned good whenever I had spare cash and cut my food budget in about 1/4th

That's an easy $300 in green I can stuff in my safe and put on my cc's

My favorite other web forum:
http://zombiehunters.org/forum

 

[manning]

If you have to default on something I would make it on unsecured debt like credit cards. A car is secured... default and they will repossess. Same with the mortgage. With a credit card they can't come get that meal you charged or those jeans etc. They will ruin your credit and probably call you 100 times a day. But at least you still have a home and transportation.

Just pay the interest on the CC for now. And quit using them. Any spare money you don't know what to do with, use it to pay down the loan. If you are able to get a home equity line of credit, get it and use it to pay off the credit cards. You lower the rate and can deduct the interest on your taxes.

What you want to do is to pay off all debt as soon as you are able to. Any spare money goes to debt reduction.

You don't take vacations. You don't eat out (rice and beans, beans and rice). You get rid of cable and, ouch, the internet. You get rid of any cell phones.

And as Dave Ramsey says "get a job delivering pizza." He maintains you can make some money doing this.

If you have more cars than you need, sell them. If you are making big payments on cars, sell them and get beaters.

Can't afford the house payments? Sell it and downsize.

Good luck to you.

 

[chloelovesdisney]

Get 2nd jobs, even babysitting or shoveling snow, etc..

 

[JR6ooo4]

Our income is down 50% at least....
DW called the mortgage company and cried at them. We are eligable for some plan, not sure the name. But our interest rate, 6.75 percent which was not that bad 5 years ago (considering our credit score...) was dropped to 2%!!!! OUr $1900 payment is now under $1000!!!! that helped alot.

also we had paid three years out of five on her car. we refinanced it back to 5 years and the payment is now half. Sure we are paying more, but we can keep the car and still make the payments on time. Just something we have to do in these times.

We had changed car insurance about a year ago. But GMAC was able to get us a better rate still. From $245 a month to about $185 now.

Fedarally backed credit cards have more options as well. We were able to drop the interest rate and make a 5 year plan on one of ours that was a little out of control.

I hope that helps some. Get on the phone and really start crying. It helps to let it out, and they seem a little more willing to help than if you just don't make payments.

Mikeeee

 

[Planogirl]

I would not get rid of the Internet as some say. Some companies only accept applications online nowadays and the search engines are a great help. You can also sell on ebay and so on to supplement your income. I would make sure that you had the cheapest option available though.

 

[disney1990]

I would not get rid of the Internet as some say. Some companies only accept applications online nowadays and the search engines are a great help. You can also sell on ebay and so on to supplement your income. I would make sure that you had the cheapest option available though.

This can be done at the local library. You do not have to have internet at home. And, yes, it is time to give up Private School. If you cannot afford to pay your bills, you are too underwater to consider doing anything else.

 

[beautybelle]

I can homeschool because I work from home, so I do have a job its just not enough to support all our current bills. We dont have a 401K to dip into either unfortunately. I have already made plans to have our TV cut off but I wasnt sure on the other stuff. I have credit card bills but I cut up the actual cards over a year ago so we've been paying the balance down already but I still owe a balance now so............
I do have a question though, like coupons for instance. Where is a good place to find coupons. I can find a few here and there but then those are for things that I usually dont buy. Where do you guys find yours?

 

[pearlieq]

This article might be helpful:

http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/HowToNotPayyourBills.aspx

Good luck. I hope things turn around soon!

 

[NotUrsula]

This can be done at the local library. You do not have to have internet at home. And, yes, it is time to give up Private School. If you cannot afford to pay your bills, you are too underwater to consider doing anything else.

Honestly, as a librarian, I advise that anyone actively looking for white-collar work keep SOME level of home internet access if it is at all possible to do so. (Dialup will work.) At many public libraries these days, the volume of patrons waiting to use the public computers mean that each patron is limited to about 15 minutes per day. That may be enough time to answer your emails, but it is not enough time to thoroughly comb through job listings, or even perhaps to properly input the details on the 8 applications per week that are required to maintain your unemployment benefits in this state.

It's one thing to advise using the library if the person does not own a working computer, but if the person does have one, it is better to maintain basic home Internet access if it can possibly be done.

 

[aprilgail2]

At many public libraries these days, the volume of patrons waiting to use the public computers mean that each patron is limited to about 15 minutes per day. .

She should check out her own library then because ours you get minimum of an hour and if no one is waiting you can swipe the scanner and stay on for another hour etc. etc.(which if you go during the day there are not people waiting, after school you get the teenagers coming to go on their myspace and facebook accounts that their parents think they don't have!)

 

[disney1990]

Honestly, as a librarian, I advise that anyone actively looking for white-collar work keep SOME level of home internet access if it is at all possible to do so. (Dialup will work.) At many public libraries these days, the volume of patrons waiting to use the public computers mean that each patron is limited to about 15 minutes per day. That may be enough time to answer your emails, but it is not enough time to thoroughly comb through job listings, or even perhaps to properly input the details on the 8 applications per week that are required to maintain your unemployment benefits in this state.

It's one thing to advise using the library if the person does not own a working computer, but if the person does have one, it is better to maintain basic home Internet access if it can possibly be done.

I can understand that. But if OP cannot afford to pay her bills, she needs to cut where every possible. I know at our local library, you can use the internet for longer than 15 minutes. Another option, is if she has a laptop, there are lots of places that offer free WiFi.

 

[beautybelle]

UPDATE:
Made it through the "restructuring" phase this time. Thank God.

 

[CowboyCO]

We are in a similar position. I lost my job 1 month ago and I was the major breadwinner. DH salary will not cover the mortgage. We have spme pretty high credit card debt that we have been spending the past 18 months on a very strick budget and paying it down. In January we are cashing out my 401K. This ( and the megar unemployment) will allow us to make up the shortfall and pay the mortgage, utillities, and food. We will pay off both cars as well, we owe about 5,000 on both. It seems cars are beeing repossessed so much faster these days. Missing car payments and having them repossessed would make it very difficult to earn a paycheck. After that we have made the decision to only make the payments on 1 credit card, the one that is linked to our checking account for overdraft protection. The rest will need to be defaulted on. I have every intention of paying on them once our income improves but for now..... It eats at me to do this but the loss of my income is making even the minimum payments impossible.

I really feel for your situation, but I have to recommend that you do not cash in your 401K unless it is absolutely required. Between penalties and taxes, you will lose 40% and that is like paying 40% interest on whatever you pay off.

 

[Nik's Mom]

UPDATE:
Made it through the "restructuring" phase this time. Thank God.

Great news. Continued prayers sent your way!

 

[beautybelle]

Thanks for all the tips. Im gonna put the ones I can use to work anyway. Ya never know when this will creep up again.

 

[Keli]

Thanks for all the tips. Im gonna put the ones I can use to work anyway. Ya never know when this will creep up again.

Wise decision, I think you are right to be proactive in trimming your spending and upping your savings.

And I'm glad that you've made it through the restructuring so far, hopefully you'll be employed there as long as you desire!