The first thing you need to do is have a good look at your ongoing situation.

Are you going to be able to obtain another Job with similar pay?

How long realistically is it going to take to get another Job?

If you are older or approaching retirement is the pension or centrelink going to be the only ongoing income?

Is doing something like Uber Driving, Air BnB or casual work possible?

Can you still survive on your partners income?

Answers to these questions will determine the approach we are likely to take going forward.  If your Income is likely to be nil or very little going forward, you need to be careful what Debts you pay.  Only look at paying Rent or Home Loans. Car Loans if you absolutely need the car. These affect the roof over your head and your ability to find work. Assess if you even need a car, especially if you are close to train lines, or Bus routes. See if you can get a reduced payment or payments on hold period for Home or Car Loans.  Explain what has happened.

If you have Credit Cards, Personal Loans or other large Debts, you will need to call those you owe money to and apply for hardship, a payment moratorium as you will not be able to make any payments at this time.  Do not agree to a payment plan with these Debts …  yet. Paying these Debts will affect the ability to keep your Home and Car.

Non payment of your unsecured debts also puts you in a better position once your Income resumes, to fix outstanding all your Debts.

Once your income resumes, if you have a Home Loan we may look at consolidating your Debts into your Home Loan with a specialist Lender. If your Home Loan is late it can affect your ability to do this, or increase the Interest you may have to pay. They will look more favourably at your application if the Home Loan has been given Priority and the Car Loan as well.

If we look at a Debt Agreement or Informal arrangement, only the unsecured debts can be put into the payment plan. We then negotiate a payment plan for the Unsecured Debts. It is easier to keep to your payment plan, if you don’t already have to catch up on the Home Loan or Car Loan.  Sometimes we will just have to work around this, if it all runs late, but give yourself the best chance of a quicker recovery by paying only your home loan and car loan.  

Needless to say unsecured creditors can be more vocal in chasing you because they do not have anything they can repossess to offset your Debt. But you need to explain your situation and look after your families and your own welfare first and prioritise your best survival strategy.

Unsecured Debts aren’t generally passed onto a collections department when you miss one payment or pay a few days later than you should have done. While different lenders will have their own process, typically you need to have missed several payments and not responded to letters and calls before an account will be passed onto collections. Collections can sometimes be easier to deal with than the actual Lender anyway. Your Credit Report will have taken a hit by now anyway, but you may have avoided too bad of a hit if you have stayed in contact with your lender.

Explain the situation, be firm about not being able to make payments till you have an income.

Of course, not all Lenders and Collection Agents are reasonable, or offer payment plans which are sustainable. Unless you have collected all the Information, Budgeted and presented a solution which is appropriate, it’s not likely they will offer one. This is especially difficult when there are multiple debts involved. Lenders tend to be interested in themselves only. That’s why most people call Money Buckets for Help.  We talk to creditors every day explaining peoples situations and seeking out the best solutions.  

If you are not going to have an income again, or it is going to be substantially reduced, you may need to get your Head around some harder options.

If you are a Home Owner and at Retirement Age there may be Reverse Mortgage and Debt Negotiation options open up for you.

Resist the temptation to use your Superannuation to pay your Debts and leave nothing for you to live off in Retirement.  

If you have no assets, Bankruptcy protects your Super and allows you to move on.  It’s a protection for you in these circumstances, not a punishment.

You need to look hard at what position any decisions you make leave you in the Long Term. Extended repayment plans into retirement are generally not sustainable or in your best Interests. We want to ensure you have a comfortable retirement, not worrying about your finances.  

So if you’ve lost your job, your situation is manageable, but there are a few steps which we can help you with to get your life back on track or moving on to the next solution.  

Money Buckets is here to guide you through. We can take it slowly and make sure you understand what’s happening and give you time to assess where you and your family are at.