If you’ve fallen behind on your payments, you’ve likely had to deal with creditors calling. While fielding these phone calls (or avoiding them, as the case may be) is annoying and stressful, they likely aren’t your greatest concern.
If you have trouble keeping up with bills thanks to a pay cut, job loss or an injury, you’re probably even more likely worried about bigger problems–paying your mortgage and keeping your home, paying your car payment so you can keep your vehicle and continue looking for a better job, paying your taxes so you don’t owe Uncle Sam and face having your wages garnished. Besides these pressing concerns, you also need to worry about keeping your family fed and keeping the lights on at home.
If you’re in this financial bind, there are steps you can take to relieve the financial pressure.
1. Borrow from family and friends. If you’re not uncomfortable doing this, you can borrow money from family and friends to meet immediate pressing financial needs such as paying for housing and food. Just make sure you have a plan for paying back the money when you get on your feet. To make the borrower feel more comfortable, sign an agreement, have a repayment schedule, and have a notary public witness it.
2. Take a cash advance on your credit card. If you can’t borrow from family and friends, you could take a cash advance on your credit card. Only do this to meet your most basic expenses, though, because the interest rate can be high.
3. Take a payday loan. Sometimes payday loans can be a life saver if you’re in a truly desperate position. Applying online for a loans has never been easier, and in many cases you can have the money in your account within 15 minutes.
4. Borrow from your 401(k). This is truly the last resort. Borrowing from your 401(k) is only a good idea if your money crunch is temporary and you can see a time in the not so distant future when you’ll be able to pay back the money.
5. File for Bankruptcy Protection. If you’re at the place where you need to borrow from your 401(k), you may want to consider bankruptcy instead. If you leave your retirement savings intact and file for bankruptcy instead, in most cases you will be able to keep both your home and your retirement.
If you’re in a difficult financial position, you have a number of options available to survive this rough patch. Which option you choose depends on the severity of your situation and when you think you’ll be back on your feet again.