Everyday there is news of massive job losses hitting some town or city in America. And everyone knows at least one person who is unemployed--if they're not unemployed themselves. But being unemployed does not need to be an experience in powerlessness. An article in the Dallas Morning News offers some good (and not so good) tips on what you can do if you find yourself suddenly unemployed--let's take a look.
The article said:
"Take a personal inventory," said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. "Consider all assets, income and expenses. Hopefully, you will not have to liquidate any assets to survive, but it is good to know what you have to fall back on."
Nothing is off-limits. "If necessary, consider selling the second car, or any recreational vehicles, real estate holdings, rental properties or jewelry," Cunningham said.
We definitely agree that an unemployed person needs to take an inventory of all of their income, assets and expenses. But we caution against selling assets without first considering the long-term implications of doing so. If an unemployed person decides to eventually file for bankruptcy the sale of certain assets may be suspect depending upon when the sale took place and what was done with the proceeds. Bankruptcy law requires that assets be used to repay creditors in proper order--some creditors have priority of others. If a debtor filing for bankruptcy has sold assets beforehand, his/her bankruptcy case may be dismissed if it was determined that the assets were sold to avoid repaying creditors.
After reviewing income vs. debt obligations, if there isn't enough money to make ends meet, calculate how much is needed to meet the basic household living expenses.
What we would add to this suggestion is that if you find you do not have enough income to pay your basic living expenses and debts you should consider filing for bankruptcy if you suspect this will be a long-term issue. The best course of action is to speak with a Dallas bankruptcy attorney about your situation BEFORE it gets out of hand. We define a situation has "out of hand" when you are selling assets just to make the mortgage/rent and put food on the table or your home is in danger of foreclosure.
"Your goal is to pay everyone, but if you must make a choice, keep your home life stable by paying your rent or mortgage, utilities, child care, insurance premiums, health care, food and keeping gas in the car," Cunningham said.
This is a great suggestion; but if you are several months behind on credit card payments, taxes or bank loans that could also jeopardize your family's wellbeing. Many unsecured creditors are becoming aggressive about collecting debts from even the unemployed. Many creditors are even filing lawsuits against debtors and securing judgments. With a judgment a creditor can seize assets including bank accounts, therefore you cannot allow these bills to become severely delinquent. If your unsecured debt payments are severely delinquent speak with a bankruptcy attorney to find out how you can protect your assets from creditors using bankruptcy.