How to Prepare for Temporary Unemployment?


October 10, 2016

Being out of work is one of the main reasons people go into debt in America, according to our debt collection defense attorney in Florida. Sometimes, unemployment comes unexpectedly. Other times, people know they will be temporarily out of work based on the time of year, circumstances, or personal choice. In any situation, you should always be planning for temporary unemployment, so that you are prepared in case of a change to your income.

Debt Collection Defense Attorney in Florida Explains Preparation for Unemployment

In order to plan for temporary unemployment, you should have a healthy savings account at all times. Opening a long term account that gives a penalty for withdrawal is a great way to make sure you leave it alone. You can even set it up so that a portion of your paycheck goes into the account. If you become suddenly unemployed, you have this as a safety net, even considering the penalty.

If you know you will be unemployed for a period of time, set up some freelance or part-time work. Many people will wait until the unemployment begins to start this process, but you should actually start looking well in advance. You can be upfront when approached as to when you can begin, but starting the process early ensures that you don’t have a large gap of time with no income.

Create a full budget, with plans to not only be caught up, but get ahead on your bills. Figure out how much money you will have to set aside each pay period. Focus on making enough to pay up your bills through the time you will be unemployed. Even if you are focusing only on the larger bills, this will make your transition much easier.

Communicate with your bill holders, especially your mortgage company. See if refinancing is a possibility, at least for the period of time you will be unemployed. This will allow you to lower your payment and make it through the financial changes you will experience.

In addition, you should consider mortgage unemployment insurance. This is an option you may not have chosen in the past, but it is a great way to prepare in case something happens.

With proper preparation, you may even enjoy your temporary unemployment. If your finances do get out of hand, and the debt collectors start calling, contact your debt collection defense attorney in Florida to help handle your communication and make sure you aren’t paying more than you should.

Source: WikiHow

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About the Author

Michael works in practice areas of Personal bankruptcy – Chapter 7 and Chapter 13, FDCPA, FCCPA, TCPA, Improper credit reporting under the Fair Credit Reporting Act (FCRA), Collection Litigation Defense, and Foreclosure Defense.