Posts Tagged unemployed

You’ve Been Laid Off – Inform your Creditors

800px-VISA_Logo_svg.png If you are currently buckling down in your spending and amping up your frugality due to a recent layoff, one of the first things that you should consider is that you probably owe money to a few people.

These people are not monsters, but they might get that way if you suddenly stop making payments to them. One of the best preemptive strikes you can make is to let them know your status as soon as possible.

Because you want to retain a record of your interactions with your creditors, you should always initiate your contact via a good old fashioned letter. Sure, it’s gonna cost you 44 cents, but at least you know that you got through to someone.

This will ensure that your creditors know your status, will work with you, and will come to know your name because your account is in arrears. Should your job hunting be less fruitful than you anticipated, your creditors will be much more happy to work with you.

Below is the letter that I sent to my creditors. Feel free to copy and past this into your word processor, and change any relevant information.

If you work for a lending company or have any inside information, I would love to collect stories on the effectiveness of this approach.




Dear Sirs:

Last week, I became another statistic.

As of this month, approximately 10% of the population of Ohio is unemployed. This number has now been raised by yet another person. Me.

As you have seen by my past record, I have every intention to keep my account up to date. I am currently seeking employment, but there are no guarantees as to who that will happen in today’s tough economy.

While my first priority is protecting my credit rating, I also want to keep our relationship friendly at all times.

I will keep in contact with you often, to let you know how things are going, but in the interim I would like to have someone from your office contact via telephone to discuss possible options, including temporarily reducing my interest rate.

You can reach me any time at:

(insert phone number)

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What to do when you are laid off

Times are getting rough. It seems like I have read about unemployment for a few years now, and had several friends who have joined the ranks of the unemployed. Luckily, it hasn’t hit me or my family, until recently. I had spent the more than 20 years with only 2 weeks total time without full time employment.

A few weeks ago, I found myself without a job. I have been working in the professional world for a good long time now, and have been on both ends of this issue, but I am now finding that there are alot of people out there who are facing this for the first time.

For those of you out here facing unemployment for the first time, I thought it might be a good idea to give you a few things to think about.

  • Don’t panic – While I can’t be accused of keeping in touch with the news more than your average guy, I haven’t seen anyone that has died lately from being laid off. Sure, your life is going to drastically change in the next few weeks, but I assure you, it will not end, nor will you get sick. Chances are, you are in the middle of a big do over in your life, a time to take inventory and make long awaited changes.
  • Don’t take it personally – Layoffs are hard on everyone involved. No one in your company wants to take part in something so terrible. If it were personal, you would have been fired, or forced into an early resignation. The fact that you were laid off means that this is not a vendetta.
  • Inform those that count on you – Many families pay in excess of $1000 a month on childcare. Since you are not currently drawing a salary, you should most definitely take these duties over. While this will save you $1000 a month, it will also cost your childcare provider $1000 a month. It’s only fair to let them know ASAP what is happening so they can plan accordingly.
    This also applies to other non essential services such as housekeeping and car detailing. You will probably be doing these on your own for awhile.
    Let everyone know so that they can make changes as your changes roll downhill.
  • Inform your creditors – You most likely have a mortgage. You may have a car payment and a credit card or two. As you are not drawing a salary currently, and your search for employment could go on for a bit of time, let these people know ASAP about your status. I have drafted a letter and sent it to my creditors just to make sure they are in the loop in case any arrangements need to be made. I will post my letter on this blog in the next few days. Feel free to use it verbatim if you’d like.
  • Tell everyone you know – While your first inclination might be to refrain from telling your friends and family that you are unemployed, tell everyone. Chances are that you know a lot of people in your personal and professional realms that are just a few connections away from employment.
  • Make business cards – In the past, freebie business cards like those at VistaPrint held a stigma. This is not longer the case. You want to make sure that anyone who wants to offer you employment at any time knows where to contact you. Make cards, and give them to everyone. The personal network still reigns supreme when making contacts.
  • Make a list of your skills – This may be a chance for you to take your career into uncharted territory. There is no rule that says that you need to go right back into the career you had before. Make that list, and see if you can glean something more enriching and more suitable from it. I will cover this in more depth later, so keep tuned in.
  • Stop spending money – Although this is listed last, it is probably the most important. While you are not drawing a salary, it is imperative that you stop spending any money that you do not need to spend. This include things such as: childcare (we will explore this in full detail in a later article), going out to eat (this too!), going to the movies, etc. Do not get rid of things that you need to pursue employment efficiently. This includes: cell phone, internet access, and any other viable communications tool.

These are very brief suggestions, which should get you through the first few weeks.

Entering the ranks of the unemployed is a disheartening and scary process, but it doesn’t have to be painful, and it can teach you a good deal of lessons about you, your friends, and your family.

I would love to hear stories of coping from our readers!

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