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Dealing with debt

How to deal with losing your job

Keep focused

When you first hear the news that you are being laid off, don't allow despair to get hold of you. Replace this feeling with action. The first thing to do is put your hands firmly in your pockets and away from your pen. Before signing any documents, making any rash decisions or taking redundancy money, you need to find out your entitlements.

As soon as you know exactly what you are going to receive, you need to work out the best way to deal with any money. Depair often results in people making ill considered decisions, so try to keep focused.

Convert negative feelings into positive action

It is natural to break down on hearing the news. Don't be ashamed of a few tears. You won't be the first and you certainly won't be the last to react to the news with shock and emotion. If you are working for a company that is struggling to survive, the chances are that the person telling you the news will be feeling awful about their task.

Let your feelings out, but don't dwell on this. Get it out of your system and then try to move on. It is very likely you will be feeling that this is unfair, but dwelling on this will not change it. For a positive slant, start to mentally list all your transferrable skills, ready for your next job application.


Ask someone who understands your terms of employment and your retirement benefits.  Ask how much tax you will pay and what makes the best sense for you financially. If you belong to a union, contact your local delegate and ask for information about your situation. The chances are that if  your employer is going through planned lay offs, the union will already be prepared and have the information to hand.

Depending on your age and your employment options, different financial issues will be your first priority. Whatever your circumstances, you will need to review your budget, loans, credit cards and savings. You may need to drastically reduce your spending on luxuries.


Unemployment offices often have information and assistance for anyone being made unemployed and the financial issues associated with this. Especially in circumstances where the unemployment is as a result of staffing cutbacks by the employer. In situations where large numbers of people are being put out of work, due to a larger financial crisis, governments often support extra infomation sessions and financial counselling. You can find out about other options if you attend one of these sessions.

What if you can't pay your bills and loans?

Beware of internet scams and companies that offer to solve all your financial problems. At times of  national economic crisis, these companies offering money at ridiculous interest rates and short term loans, start to come out of the woodwork. Speak with your creditors as soon as possible. Explain the situation and ask them about the available options. Do not  agree to anything straight away. Inform them that you are researching solutions at this point.

Seek advice from a free financial counsellor before agreeing to anything. When there is a national economic problem or an international one like in 2008/2009 your creditors will be aware that many people are losing their jobs. They will be prepared to listen to you, if you have a genuine case to put forward.

Free financial counsellors can help you take control of your situation. They will give you advice on what options are open to you and help you deal with your creditors. Contact your creditors again once you have the relevant information and inform them of the decisions you have made with the asssitance of your financial counsellor.

This is especially important if creditors hold security over your home, car or other assets. Offer only what you can reasonably afford to pay and offer something to each creditor. Try to cover interest or charges applying to the debts. Ask if the creditor will agree to reduce the interest on the debt until you are back on your feet again.

Start looking around for another job immediately. Ring around your contacts and networks and start applying as soon as possible. Keep in a routine, getting up early and only taking weekends off. It is very easy to slide into depair if you don't keep motivated. If it appears you will be looking for another job for some time, try to participate in some voluntary work to keep yourself attached to the job market.

Unlike paid work where, your employer will keep you within the activities for which you where employed, voluntary work can allow you to learn other skills. It will also stop you from becoming isolated with your debt worries. When you are in a position to apply for other paid work, any volutary work you have done will give you an advantage over other equally qualified applicants.

One of the most important things is don't dwell on the negatives. Try to keep busy and focussed.

Disclaimer: All the information above is provided as a service for individuals and institutions. It should in no way be construed as a recommendation as an investment. Investment decisions should be based on the risk tolerance and planning horizon of the investor. Market participants must understand that past performance is also not a guarantee or predictor of future results.
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