If you are unemployed, it can be difficult trying to resolve your credit card debt. When you are laid off or fired, your source of income can be substantially reduced. You have to develop a plan or strategy when it comes to dealing with your debts. The way you operate and function has to change drastically if you want to survive. Your credit score may decline if you are late with payments. If you can make payments you stop your credit card accounts from becoming severely delinquent.
Determine your sources of income. When you are laid off or fired, you may receive unemployment compensation, which is far less than what you were making on your regular job. See how much you are receiving or how much you will be receiving in the near future. Check out your savings account and see if you have money available for your living expenses, such as food, utilities, and rent or mortgage. You also want to see about paying your car note. You will need your car to look for a job and other miscellaneous trips.
Make a list of every credit card that you have which has a balance. This is the first step to resolving your credit card debt. You have to see what you are dealing with. List all of your balances from smallest to largest, as well as the monthly payment. You also want to list the interest rate you are paying. Add up the balances and add up the monthly payments. Compare your monthly payments to your income. Depending on how much credit card debt you have, your income may not be enough to pay your credit cards plus your other bills. See what type of shortfall you have.
Call your credit card companies. Start calling every credit card company you have and explain your situation to them. Let them know what your expenses are as well as your income. They will try to assistance you with your situation. A credit representative may ask you if you have any job prospects lined up. Then the person will help you establish a plan of action. Some will cut your interest rate substantially and give you a lower payment. There are situations where credit card companies will suspend all the interest you pay for six months or year. Fees can be eliminated as well. Try this strategy with every credit card you have. Try to make arrangements for a new payment. If you can arrange to make the new payment, in 30 to 45 days, that will help you considerably. Delaying the payment as long as possible helps you get your finances in order.
Start sending in your new payments. You may be able to manage your budget with the new changes. If you cannot make any payments, you may have to let the credit card companies know that you cannot pay. Keep in touch with them periodically and let them know what you situation is. Many people who are unemployed don't have enough money to pay their mortgage and utilities, and buy food. To survive, you may have to not pay the credit card company anything. They will continue to call you from time to time to see if your situation has changed. Some credit card companies will charge your account off as a bad debt after 180 days without a payment. A charged off account is an accounting term, which means the company has determined that it cannot collect your balance and your account was reported as a loss. The account is usually sent to a collection agency and your credit report is damaged severely. You may need to exhaust your resources and borrow from a friend or relative, so that you can make a payment, to keep this from happening.
You may want to contact a debt management company. Make sure it is a non-profit organisation. Many organisations such as this charge fees. Avoid any that charge fees. You will need a source of income to pay into the program. Try to pick up a part time job until you are employed full time.
As a last ditch effort you may have to file for bankruptcy protection. An automatic stay will be issued by the court which means your creditors must stop all collection activities. A bankruptcy will damage your credit report and could remain on your credit report for 10 years. You may be able to settle a debt but there could be tax implications. Check with your accountant or professional tax person.