I have been through layoffs and it sucks. There’s no other way to describe it, but there are things that can be done to make it a little easier. Please accept my condolences on your loss. You have now entered a survival situation and must reorganize your priorities.
It happens to everyone, at least once in their adult life. Something happens, and your finances end up out of control. This could be something as major as the death of an income earner or divorce, or as minor as just being a day or two late on a credit card or utility payment. T
he end result is usually a lot of harassing phone calls, mounting debt, and a loss of hope. The aim of this hub is to help get you on the road to retiring your debt.
This is not a sales pitch, or a recommendation of any company or program. This is an adaptation of my story, made generic for everyone’s benefit.
We had simply been a few days late on a single payment on one of the credit cards, and the next month we discovered that the interest rate had shifted to the default rate on all of our cards. In some cases this was over 30%.
This is known as ‘universal default’. This, coupled with the new law doubling of the minimum payment (so you can pay it off faster) sent the monthly minimums through the roof. We could not afford to pay the cards and feed our kids, so we fed the kids and let the card payments slide.
We realized we needed to get things in order, so we contacted a consumer credit counseling service. This stopped the calls, and got us on a payment plan we could afford, and also lowered the minimum payment. In the 3 years since we began this process, we are down to only 1 credit card with a balance, and this saved us from bankruptcy.
Ours is a typical case, though the story is years in the telling. There is NO overnight fix.
Anyone who says they can increase your credit score, or eliminate your debt in a matter of days is probably being dishonest.
Here are some bullet points to remember.
- At the first sign of trouble (job loss, missing a payment) call all your creditors and see if you can get your interest rate lowered. Credit card companies are more flexible than mortgage holders. Some credit card companies will flat out refuse you, but you must try.
- Call a consumer credit counseling service. They will help you; it’s what they do. There may be a small fee included with the first payment.
- Prioritize your monthly bills:
- Rent or mortgage. (You need a roof over your head)
- Car loans. (No car=no job in most cases)
- Food and living expenses. (Gas, water, electric – Ask about a payment plan with utilities)
- Credit card and other debt (These are the most flexible, in most cases, though some are evil jerks who care nothing about your plight and just want the money NOW.)
- Reduce your discretionary expenditures. (Eat out less, rent DVD’s instead of going to movies, etc.)
- KEEP THE ARANGEMENTS YOU’VE MADE!
This is not intended as investment or financial advice; it is just a way of letting you know how my family dealt with a similar situation. If you feel it necessary, do not hesitate to enlist the services of a licensed financial adviser or competent attorney.
There is no shame in this, and being laid off is not your fault. You must realize that this is not the end of your career, just the end of this job. You have now been freed to pursue something you’ve always wanted to do.
Understand that you are not your job! You are a multi-faced individual who is more than what is on your resume. If you don’t believe in yourself, a prospective employer may not believe in you either.
Wounded self esteem is not fatal, and all is not lost. Being laid off is not an easy time, and now is the time to talk it out with your family, friends, and anyone else who will listen. Should your situation seem unbearable, you must seek professional help. You get fired because you screwed up; you get laid off because someone else screwed up.
Networking may be the best way to find a new position. Your network is your family and friends, both in your neighborhood and online. Be specific in your requests to your network, but don’t “hold out for a management position” if you get a non-management job offer. Your previous employers may need some help, or know someone who does.
Put your resume on CareerBuilder and Monster. I got an entry level job on Monster, and it gave me the experience to land my current position. CareerBuilder still sends me matches which I look through, just in case. Your friends and family will “know a person who knows a person”. Maybe there are freelance or project-based jobs out there which can give you some income and something else to put on your resume. Check out every lead, you never know where it will take you! Make sure you have a plan ‘B’ and ‘C’
You’ll need to update your resume. There are professional, fee-based resume writing services all over the internet. There are also several hundred sources for free resume advice. Examine the free sources and beware of scams. The job hunting sites will have more information, for free, than you’re ever likely to use. Examine your old job performance reviews, and focus your resume on your strengths and passions.
If you’re not sure what you’re really passionate about, ask your network what they see as your happiest moments. Seeing yourself from the outside is an excellent learning tool. Include any short time or freelance work in your resume, especially if it added to your marketability. Don’t worry if you’ve been laid off a few times in the last year. Employers know what’s going on in the marketplace, and this should not be a black-mark.
In fact, it may help to show the prospective employer that you’re a go-getter and are not going to give up. If they ask how long you’ve been in customer service, your answer should be something like “I’ve been in customer service since I got my first job. Every job’s ultimate goal is customer service.” This is not only true, but it might help set you apart as someone who understands more than just his or her job. Don’t forget to show the company how YOU created added value to your previous positions.
One alternative to seeking employment is starting your own business. This is not the easier way, by any stretch of the imagination, and the first five years (if you make it that long) will be the toughest. You’ll initially get less pay, and no benefits, for the 60-80 hours a week it will take to get a small business off the ground.
Your own business is a massive, risk-filled undertaking, but it can be lucrative and more satisfying than punching a time clock. Examine your hobbies for that one thing you’d rather do than anything else. Everyone has that thing they daydream about doing; there’s no reason you can’t make a living out of it. This is not a recommendation, this is an option.
Perhaps you have the wish to set up something not unlike this site, which you will try and turn into some income. This is not an easy fix, by any means. As of January, 2010, there are about 165 MILLION websites out there.
Imagine showing up for a job interview and 160 million people showed up for the same position! While there is still plenty of room on the internet for your venture, please realize that this will be no easy row to hoe. In the next week or so, I will be posting a short bullet-point-style article about some things I have learned over the years.
I wish you the best in this difficult time.