What do you do when an anticipated paycheck doesn’t come?
How do you determine which bills to pay first?
Here are 5 steps to take when life shuts down…
1. Take inventory of income and resources.
- Can you ask for alternate payment arrangements?
- Are family and/or friends available to help?
2. Review all expenses.
- Separate priority (needs) from discretionary (wants) expenses
3. Inventory your debt.
- List amounts owed beginning with smallest balance using our MyMoneyCheckUp tool at mymoney.LssSD.org
4. Prioritize bills.
- Mortgage or rent payment
- Food (basic grocery needs for eating at home)
- Vehicle payments
5. Communicate with creditors – in writing.
- Mortgage – Make an appointment with us to discuss options.
- Auto loans – Ask for refinance or modification, perhaps adding payments to back of loan.
- Credit cards – Ask for forbearance or hardship plan – make sure you can honor your promise of new payment, or creditors will revert to collection methods.
- Medical debt – Ask about forbearance or hardship options.
- Student loans – Ask about forbearance or deferment. More information here: http://studentaid.ed.gov/repay-loans/deferment-forbearance.
Remember to request new payment plans in writing!