Can the Unemployed Manage to Eliminate Debts?
Can the Unemployed Manage to Eliminate Debts?
Unemployment is at its worst in this recent economic meltdown and these unemployed people are struggling to pay off debts. Are you in a similar situation? Then you can file bankruptcy as it is considered to be the last option of debt relief programs. But if you declare bankruptcy then it might ruin your financial future. Therefore, you can follow a debt management plan to avoid the adverse effect on your financial situation.
Here are a few tips that will help you eliminate your debt without damaging your financial situation:
1. Look for a job:
You can be successful in eradicating your debts if you get a job immediately. You can use your income to pay off the debts and attain financial liberation. You need to work hard in order to get a well paid job therefore start applying for it. Until you get a job try to deliver newspaper, set up a roadside soft drink stand or deliver pizzas and utilize the money towards paying off your debts.
2. Negotiate with the creditors:
The next crucial step to eliminate your debts is to negotiate with the creditors to lower the principal balance and interest rate to make it affordable. You can easily convince the creditors by stating your financially distressed situation. If you directly approach the creditors then you can avoid the threatening calls from the creditors. Make sure that you are aware of the Fair Debt Collection Practices Act (FDCPA) then you can take action against your creditors if they harass you.
3. Pay the accounts down.
Right now do you have a part time job? Then inculcate the habit of saving so that you can start paying off your debts immediately. If you are unable to manage your expenses then formulate a budget plan as it will help you pay off the debts in an organized way.
4. Keep a track of your credit report:
You need to keep a track of your credit report once you pay off your debts. Make sure that your credit report shows paid in full otherwise your credit rating will drop. Therefore, request your creditors to notify the credit bureau as “paid in full”. You should review your credit report every three months in order to check if there is any discrepancies on it. If you locate any wrong entries on the credit report then ask the credit bureau to remove it.
5. Avoid borrowing:
It is advisable to avoid borrowing in order to secure your financial situation. You can create an emergency fund and deposit a portion of your income in the savings account then you can prevent yourself from taking out new loan.
GUEST POST: Stewart Smith, financial writer.
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There is an expression that is often used in sales: “You are only as good as your last deal.” What is meant by that is that management has a short-term memory and no matter how good you were in the past, they are focusing on what you can do for them right now. It may seem unfair to those who have worked very hard throughout the years to find out that their jobs may be on the line due to one poor month of performance. However, this is a reality in this market.
The new movie, Larry Crowne, with Tom Hanks and Julia Roberts, is about Hanks’ character, a top performing employee who has won the employee of the month something like 8 times.  He is self-confident that management has requested his presence in their office to tell him that he has just won for the 9th time. Instead, he finds out that they are letting him go due to his lack of a college education.
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- Work harder than your coworkers. That may seem to be common sense, but it is surprising how many people overlook the fact that they may not be number one in the office. There is an old expression: I don’t have to outrun the bear. I just have to outrun you.  Think of being laid off as the bear and you have to be better than your coworkers to survive.
- Multitask. One way to be more efficient at your job is to multitask. Some may argue that there is no such thing as true multitasking but there is such a thing as combining small jobs together so that you get more done in less time. I often share an example with my students of how I would type my call notes while “dialing for dollars” so that I could make twice as many phone calls as my coworkers who waited until the call was completed to type up their notes. Find ways to combine things like this to be more efficient.
- Add value through education. The Tom Hanks example is a good reason why you should consider furthering your education to compete. You might find that a certification is enough. You might find that an MBA would add value. Find the thing that makes you stand out from your fellow coworkers.
- Put in the time. If you are the last one to get to work and the first one to leave, you may find that management has noticed. Look around your office and pay attention to who gets there late, who lollygags around and doesn’t work hard. Put in the hours but also be sure that management sees how hard you are working. There is no shame in copying them on things that show you have done well.
- Work smarter vs. harder. Some people think that just putting in more work hours means they are working hard. If you are the guy/gal who plans the plan to plan the plan, then you are not efficient. A plan is important to keep you on track. Just be sure you don’t spend all of your time planning and none of your time doing.
If you do these 5 things, you’ll be well on your way to outrunning your coworkers and avoiding the bear (loss of employment).
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