What Bills to Pay After the Loss of a Job
When your income drops after a job loss, you might find yourself unable to pay all of your bills. Although missing payments on all types of bills can trigger late fees and damage your credit score, some have more serious consequences as well. Focus on the most important bills first if you cannot afford to pay all of them.
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Housing
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Keep a roof over your head while you are unemployed by prioritizing your housing-related bills. Pay your mortgage or rent, your homeowner's insurance, property taxes and basic utilities. Cutting back to basic phone service and getting rid of cable or choosing a smaller package can help make these bills more affordable. In addition, if you own your home, contact your mortgage lender to explain that you are unemployed and ask if you qualify for a reduced payment plan.
Transportation
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If you live in an area without public transportation, keeping your car during unemployment is essential. It will allow you to keep going to job interviews and to get yourself to your new job when you get one. Defaulting on car payments can cause you to lose your car, which can be disastrous if you are underwater on your loan and you still owe the lender after the car is repossessed. According to MSN Money, your lender can repossess your car if you are just one day late, although many wait until you are 60 days late. Keep making insurance payments, too, and have enough money on hand to pay for gas.
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Strategies for Other Bills
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If you have student loans, contact your lender as soon as you lose your job. Many lenders allow borrowers to suspend payment during times of unemployment by applying for deferment or forbearance. Although interest will continue to accrue, your credit score will not suffer. If you can pay your bills for credit cards and other types of unsecured debt, doing so will save your credit score from penalties. If you can't pay, contact your creditor and explain the situation. You might be able to negotiate a lower payment while you are unemployed. Even if you have to miss payments, creditors of unsecured debts usually do not send them to collections agencies until you are at least six months behind, according to MSN Money.
Money Management Tips
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The lower your expenses, the longer your savings will last. Stop buying new clothing, purchase groceries on sale, opt for beans and other low-cost proteins instead of meat and don't buy food from restaurants. Apply for unemployment benefits immediately so you can get your first check within a few weeks. Look for unconventional sources of income, such as renting out a room in your house or selling your books, movies, electronics or clothes online.
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