Unemployment is one of the hardest things one can face. It’s tough not knowing when you’ll get paid or when you can find new employment. When combined with a lack of money and an accumulation of debt, the situation can become extremely difficult to manage. When you do not know where your next debt repayment will come from or if you will ever be able to make the repayments, the last thing you want to experience is creditors chasing after you for their next debt payback. In the worst-case scenario, collection calls can be extremely annoying, and you might even be threatened with having your wages garnished. The measures you can take to get your affairs in order are outlined in this article.

I’m broke, unemployed, and in debt. Where do I begin?

One of the steps to take if your financial position becomes overwhelming and you’re confused about what to do, is to contact your lenders to discuss your circumstances. Let’s discuss further the different things to do to salvage the situation.

Contact NSLSC (National Student Loans Service Centre)

As soon as you realize that you may not be able to keep up with your student loan payments, you should notify the government agency that financed your loan. Check if you’re eligible for repayment aid or a monthly payment reduction. The NSLSC will gladly talk through your available options with you in order to assist you in getting your life back on track. When you are in need of assistance, these options can reduce the amount of money you owe in student loans, and they can prevent your debt from growing while you are unemployed. It also prevents late payments, which hurts credit. When you have secured alternative employment, you will be in a position to boost the amount of money you pay each month toward the principal of your outstanding student loans.

Notify Your Mortgage Company

If you currently have a mortgage, it is imperative that you communicate this information to them as soon as possible. Unless you default on your mortgage payments and are unable to keep up with your payments, there should be no difficulty with your mortgage while you are out of work. Paying your credit card bills late might lead to legal action, but failing to make your mortgage payments can have far more serious repercussions. If your property goes into foreclosure, you could be evicted from your home. Because of the additional costs that would be incurred, the majority of lenders would prefer to steer clear of this situation, and as a result, they will prioritize working with you. As a result, if you find yourself broke, unemployed, or in debt, inform them. In most cases, they will provide you with forbearance, which translates to the possibility of having your regular payments put on hold while you look for a job. Once you get a job, any payments that were previously suspended will be reinstated.

Other lenders

Unemployment should be reported to more than just your mortgage lender; any lender you owe must be contacted. Call them to explain your situation and ask if you can postpone or cut payments while you seek a job. Ignoring the problem and hoping it goes away is a bad idea. This could lead to collection calls and wage garnishment. Proactively communicating with lenders will help. In the worst situation, you’ll still need to make payments, but you can halt or cut them temporarily. 

Re-evaluate your Debt and Spending

After contacting your lenders, prepare a list of your debts and payments so you know what you owe. Include the debtor’s interest rate and due date. After completing this activity, you should know all your living costs. Since your employment is no longer providing you with the cash it used to, you have an immediate and pressing need to reduce the amount of money you spend. Reduce non-essential expenses like dining out, takeaways, streaming services, and subscriptions. This will limit financial damage so you can recover quickly when you acquire a new job.

Making Money While Job Hunting

After taking the procedures above to limit debt harm and handle any repayments, your next task, if you are broke, unemployed, and in debt, will be to bring in any income you can while you look for work. There are various ways to enhance your income outside of full-time work. Consider freelancing your creative abilities in areas such as design, drawing, or copywriting in order to make money off of them. You may sell paintings, babysit, walk dogs, or do deliveries as a side gig. Selling old clothes or electronics can also provide extra cash. You may even want to get a part-time job to help pay the expenses while you search for a full-time position.

Discuss Debt Solution Options with Debt Experts

If you are currently unemployed, it is quite hard that you will have the means to repay a loan, so it is in your best interest to steer clear of taking one out at this time. If you have an excessive amount of debt, you have debt solution options like debt consolidation loans, debt settlement, consumer proposal and bankruptcy.  Our debt experts at EmpireOne Credit have years of expertise assisting Canadians who are currently unemployed, broke, and struggling under the weight of debt. We will assist you in gaining an understanding of the benefits and potential drawbacks associated with each debt solution you may consider. Consultation is free and friendly. Contact us today!