How many times have you heard "I just lost my job" and thought .. it won't happen to me?
Well my brother-in-law, thought the same thing. He had 26 years with the same company, things were a bit tight, but they still had work to do, in this small machine shop that he had worked at since he left high school.
The day he got his notice, he was stunned, but when he thought back, he realized there were signs on the wall, that he just didn't want to see. Hydro cut one day, and back on the next. Suppliers refusing to ship until they were paid, but somehow they got paid. He kept thinking, it was just a glitch. But he just didn't want to admit that this company, his job, and this family of people he had worked with for most of his adult life, were about to face closing.
The day he got the notice, he came home early to my sister (his wife) and she was equally stunned. She never thought it would happen to him, he had so many years there! They thought he may get called back, so for a few days, they did nothing.. but then reality set in. The company locked its doors and that dreaded letter of "receivership" came in the mail. Yes, the company had gone bankrupt. He kept saying "I just lost my job" hoping it would sink in, he just couldn't believe it.Credit: morguefile.com
Once reality did set in, now it was time to see where they sat financially. I am a bookkeeper and tried to help. You see, my husband and I had been in this position once before, and there are things you have to get working on right away for your financial well being. I know you are stunned and feel disbelief, but you have to get started on this road before it is to late.
Job loss is bad enough, without having creditors calling you day and night and facing bankruptcy yourself. Telling them that "I just lost my job" is not going to fizz on them at all, they want their money. You need to address this before it gets that far.
So, you need to sit down together with all your bills and figure out where you are and what you are entitled to. If you are totally overwhelmed, ask someone at your bank to help you figure it out. The first thing you need to do is figure out how much you are still entitled to and likely to get. What I mean by this, is you may be entitled to severance pay, like my brother-in-law was, with all his years service, but the company went bankrupt.. don't be holding your breath for your payout until the company sells its assets. He did get his vacation pay, so that was something.
Apply right away for employment benefits, as this can take a couple of weeks to get started. Make sure you have the right paperwork from your company to do this. This is a big one. Most people have not applied for benefits before, and there is nothing worse than standing in line for your employment benefits, only to get to the counter without the right papers.
If you own a home and have a mortgage, and you know this is going to be a problem to pay, go to your bank and explain the crisis BEFORE you miss your first payment. At this point the bank can help you. You can request to pay "Interest Only" payments, which should cut your payment down. Yes, it means you are not paying anything off your mortgage, but for now, it means you can keep your house and a roof over your head.
Try to keep up with your utilities, as these are necessary, but try to cutback, turn down the heat, turn off lights, shorter showers etc. Remember this is a temporary crisis, you need to make cuts where you can. If you have credit card payments, phone them up, and tell them you can only pay "X" amount of dollars per month for now, but promise not to use the card until you are employed again.
Most companies are likely to deal with you and make alternate arrangements, if you take the initiative and talk to them BEFORE you start missing payments. Once you start missing payments, then there is not likely going to be any negotiating.
Cut out your extras that you can, cut back your cable to basic channels, go to the library to use the internet, and rent movies from the library. Let your extended family know about your crisis. It takes too much energy to try and pretend "everything is OK", they could help with babysitting or whatever you need for emotional support. Also, they can spread the word about you looking for work. Word of mouth is a good way to get a job. Not all jobs are advertised at the job center.
If you start making cuts to your budget right away, then you will get through this temporary crisis. Remember, this is temporary. You will get another job, maybe this one will be better than the last one. "I just lost my job" could turn into something better. Think positive. If nothing else, you now have a in depth relationship with your bills, and know what you would change when you are back on your feet.
If you are lucky enough to still be employed, start looking at some of your cash spending. A latte on the way to work, a muffin on the way home, takeout pizza... all of these add up, and if the day comes that you come home and say "I just lost my job".. you need to know where your money is going. The crisis is easier to ride out, if you have a plan for your finances.