Facing a job loss in these tough economic times can be terrifying; but there’s no need to panic. Having a plan in advance of receiving the pink slip can save you lots of money and stress.

Step #1 – Once you suffer a job loss you need to take a careful and honest assessment of your financial state. How much money do you owe your creditors? How much money do you spend on monthly expenses? Include everything! And finally, how much money will you bringing in on a monthly basis after your job loss (ie. child support, unemployment insurance, etc.)

Step #2 – What are the necessities? After suffering a job loss, you won’t be able to live the same lifestyle as before. You need to save money if you plan to financially survive the job loss. What that means is that you must decide what which expenses are necessities. Hint: Rent/Mortgage, food, water, lights, gas in the winter are all necessities after a job loss. You will always need food, water and shelter with adequate protection from the elements, regardless of your employment status.

Step #3 – Raise some cash and save some money. After suffering a job loss you want to downsize your lifestyle, cut unnecessary expenses and raise more cash if you can. One way to do this is to get rid of so-called “assets” that cost you money such as the 2nd car that has a monthly note attached to it or the summer home with a 30 year mortgage. You may even want to consider emptying the $100 a month storage unit holding all of the stuff you never use or visit.

Step #4 – Dump the debt. After a job loss it is important that you get rid of or reduce the amount of debt you’re paying. If you can’t afford to make payments on your debt without jeopardizing the financial health of you and your family, you may want to consider repaying or discharging the debt in bankruptcy.

Call for a free bankruptcy consultation