Dealing With Financial Emergencies

By Jacob Joseph

DEALING WITH A FINANCIAL CRISIS
Have you recently been laid off from your job? Behind on your bills? Living paycheck to paycheck? No matter what financial crisis is effecting you, the first thing you need to do is take a step back and assess your situation and what all of your options for resolution are. The information below will help you make wise choices that will help you rebound from your financial woes.

Evaluate your situation
Answering the questions below will help you grasp the full intensity of your situation:

-- What is the total amount that you owe?
-- Who do you owe the money to?
-- When does the debt/s have to be repaid?
-- Are you being offered a repayment plan by the creditor/s?
-- Have you discussed all available alternatives with your lender/s?
-- What will the impact of not paying your debt be?
-- How long will it take for this emergency to be over?

Explore your options
Below are some scenarios offering resolutions to common financial crisis.

-- Can't pay smaller bills?
When paying small bills like credit cards, cable bills, phone bills, etc., contact the companies directly to see if some sort of arrangement can be made that will allow you pay off the debt over a longer period of time.

-- Having a problem paying larger bills?
If you are having problems paying your home mortgage or car loan, you need to get in touch with your lender as soon as possible. It is typical for lenders to offer a forbearance and modification program that will help you deal with your short-term financial issues. If the problem extends beyond the forbearance and modification period, you will have to consider dipping into savings or getting in touch with a HUD-approved housing counselor for help. You may want to consider applying for a home equity loan or refinancing your mortgage to help pay your debt.

-- Too much debt?
If you have a great deal of credit card debt, but a steady income, you should develop a strategy for eliminating the debt. You need to determine what you can afford as your monthly payments. First, determine what your obligatory debts are each month. Subtract this total from your income to help determine what can be used to pay off credit card debt.

-- Do you have debts that are in collections?
Collection agencies typically handle unpaid debts like medical bills, credit card debts, utilities, etc.. If your debt is in collections, you are going to receive a great deal of letters from the collecting party. You need to establish contact and try work out a repayment plan. They will likely offer you the opportunity to settle your debt at a reduce rate.

-- Have you recently lost your job?
Paying bills becomes very difficult if you become unemployed. In the event that you become laid off, you should see if you are eligible for unemployment. If you do start collecting unemployment, you still should start seeking a new job immediately. You do not want to prolong your job search and them be in a situation with no job and no unemployment funds. A good idea would be to get in touch with your creditors, let them know of your situation and see if any sort of plan can be worked out that will offer some extension of payment for your bills.

-- Has an unexpected illness effected you or a family member?
Medical bills are very expensive, and add up very quickly. Make sure you are in constant contact with your insurance company and the medical billing department regarding your case. It is possible that you will be able to pay your medical bills off at a reduce rate, over an extended period of time.

Taking initiative
Below are a variety of ideas that will help you deal with a financial emergency.

-- Credit cards
Credit cards are probable the most sensible way for dealing with a short-term crisis. In order to maintain your current credit score, keep your credit card balances lower than 35% of your limits.
-- Savings
If you have money saved for emergencies, use it! You can avoid paying interest or fees on funds that you borrow from savings. However, if you touch your 401k, you may have to pay a 10% penalty. This 10% is likely going to cost less than a credit card or loan.
-- Debt help
Star Loan Services offers a free debt consolidation program that will help eliminate your debt by as much as 60% at a reduce rate, with eliminated interest charges.
-- No credit check emergency loans
If you don't have any money in savings and you need quick cash, then you should consider applying for a cash loan of up to $1000 with no credit check. These types of loans allow you to borrow small amounts of cash, at low interest rates (usually between 7-20%).
-- Unsecured personal loans
These loans are ideal for those with steady incomes looking to borrow larger amounts of money. You can borrow from $1000 - $500,000. Available loan terms are between 1-6 years. Interest rates for these types loans typically range between 5-22%.
-- Using the equity from your home
We offer a variety of home loan products that will allow you to use the equity from your home for settling debt.

Be calm!
Don't let a financial crisis take over your life. Considering the options and suggestions above will help lessen the impact of your money woes. Remember, everything always works out in the end!

Jacob Joseph is a financial expert for http://www.starloanservices.com. At Star Loan Services you can get a

free copy of your credit report and apply for vaious types of loans and credit.