Can’t Work, Can’t Pay? Managing With A Reduced Income

There are many times in life when it is entirely appropriate and even necessary to borrow money. Buying a home and buying a car are both big expenses, but most of us couldn’t live without them. Other loans, like home improvements, and a new laptop crop up. Over time, the number of outstanding loans or debts increases. But that’s OK because you have a reliable job that covers all of your outgoings… until something goes wrong.

Losing your job, or being unable to work can be disastrous for a typical family. Any savings can quickly dry up, and without your regular income, it might become impossible to keep up the repayments on those loans. This is when the creditors can start to get nasty. It starts with a few demand letters, and then come the threats of debt collectors or even bailiffs knocking on your door. It’s important to address things very early on to avoid all of this unpleasantness.

So where do you start? As soon as you are out of work, check all of your finances. You need to know exactly where you stand so you can manage your money. Start with your savings account. Now list your repayment amounts. How long can your savings last? If you’ve not got long, you need to find another source of income fast.

Of course, there are times you can’t work so finding another job isn’t practical. If you have become ill, then contact your insurance companies to see if you are due any payout. Then contact your creditors. Try to agree a revised repayment plan that better suits your current circumstances. With a doctor’s certificate, they should be willing to help you out a bit here. 

If you have been injured, then you need a prognosis for recovery times. Accidents happen, but it might be best to make sure you have legal representation from places like http://www.laventlaw.com/tbi/ if your injury is serious. Getting help means you may be able to get your financial situation sorted out a little quicker too. Your health problems might already be costing you extra expenses.

Most loan companies are sympathetic to these difficult situations. Many will help you out by reducing your repayment amounts for a while. They might encourage you to take out a different type of loan. Once you have these new figures in place, it’s really important to draw up a new budget. If you’re still falling short, it might be time to develop a new plan of action. Some of your loans may be for purchases of goods. Are you able to return them to cover the outstanding amount?

If you can’t return them, can you sell them privately to cover as much of the outstanding loan as possible? Perhaps you can sell other items to help you clear your debts. Keep in contact with the companies you owe money to and regularly review your situation. Hopefully, things will improve quickly, and you’ll be back at work in no time. In the meantime, tighten your belt and stay on top of your future spending. Get well soon.