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The recent announcement that our national unemployment rate dipped 0.4 percent brings little relief or jubilation to the 9.0 percent of folks still unemployed. Some estimators believe a more accurate jobless mark is north of 20 percent, if you include all of the people who’ve moved into the underemployed ranks by replacing their $40,000+ per year jobs with minimum wage gigs.

Whether they continue to search for a new job or at least a position approximating their previous level of employment, most people are left to find ways to deal with fast-growing piles of bills and debt.

Gerri Detweiler, personal finance expert for Credit.com, offers a number of tips to help people try to right their foundering finances. For starters, she says people need to do their best to at least pay the minimum on their debts until they are back to work.

[Resource: Not sure where you stand credit wise? Get your Free Credit Report Card to find out.]

“Unfortunately these days, it takes a lot longer to get back to work than you might expect,” she says. “So, if you make the minimum payments, you will preserve your credit history, and you will also preserve cash, which is important.”

Another critical strategy, Detweiler says, is to avoid living and spending as though you were still employed. Step one is to put your credit cards away in a safe place and limit their use so that you don’t keep racking up more debt. Use them only if you absolutely need them, perhaps to pay a heating bill or make a car insurance payment. She vehemently recommends limiting credit card use to “definite, essential emergency expenses.”

An Austerity Budget … and Other Tips

While you might think that spending less lavishly would be common sense, Detweiler says she’s found that a lot of people take whatever money they have from their severance packages, savings, or unemployment checks and live as if their employment status hasn’t changed, instead of cutting back on expenses as much as possible. Some of that might be in anticipation of finding a new job quickly, which isn’t the typical case right now. People might also end up working for lower pay or becoming independent contractors and need more money to pay their own health insurance, for example.

“Yes, it’s a very stressful time, but to whatever extent possible, try to go on an austerity budget,” Detweiler says.

Here are a few more of her tips for dealing with bills and debt while unemployed:

● Apply for unemployment benefits immediately. Again, don’t take the risk that you might get a job quickly. There’s nothing embarrassing about it. You can use the money to help pay bills and hold your debt down.

[Resource: How to Get Unemployment Benefits]

● Avoid tapping your retirement accounts. Generally, these accounts are protected from creditors, so you don’t want to deplete them unless you have a strong game plan. For example, you’ve gotten back to work, and you’re going to use some of that money to settle debts. But you don’t want to do it when your future is uncertain, because that money is almost always safe from your creditors, even in a worst case scenario should you end up filing for bankruptcy.

● Prioritize your bills if you can’t pay everything. Generally, keeping a roof over your head may be your top priority, but not always these days. Some home owners may have to let their home go, and many have found that the wait period for banks to foreclose after the lapse in payment has extended to a year or two. Detweiler recommends talking to a housing counselor or a bankruptcy attorney to learn what your rights are in your home state.

[Article: Facing Foreclosure? You Have a Longer Wait.]

Additionally, if you can’t pay everything, pay unsecured debts like credit cards last. You can usually place them lower on the list since they are unsecured, so there’s nothing that the lender can repossess to make you pay. They may eventually be able to sue you, but that takes a while.

● Eliminate or restructure bills whenever possible. For example, if you don’t need both a landline and a cell phone, get rid of the landline. Look at your bills for services that aren’t absolutely necessary, such as voice mail, if you can use an answering machine, or texting. Talk to your service providers to explore any options that might reduce your bills. Call your creditors to see if you can work out a more affordable payment plan.

● Check out the website unemploymentlifeline.com. It’s a service of the AFL-CIO, but you don’t have to be a union member to use it. Type in where you live, and the site will link you to resources in your area that can help with utility bills, food or other essential expenses. Take advantage of as many resources as you can. You can’t know how soon you will be back to work, so don’t be afraid to look for help as quickly as possible.

Image: meddygarnet, via Flickr.com

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