How seniors can deal with financial emergencies

Financial emergencies have a nasty habit of cropping up just when you least expect them. So, if you are dealing with one right now such as an illness, a trip to the hospital or some form of disability, or any other reason not related to medicine or health, here is a three step guide to assisting the elderly in dealing with fiscal emergencies.

The first step is to carefully assess your position:

An unexpected visit to the hospital or even a general practitioner can leave a great void in one’s budget. So, if you are in a financial crisis, try to answer the questions as follows, just to get a general understanding of your current circumstances.

a.)    Do you have any existing debt?

b.)    Who are your creditors?

c.)    When do they expect you to pay up?

d.)   Do your creditors have a repayment plan you can avail of?

e.)    Have you discussed your repayment options with your creditors?

f.)     What consequences will you face if you do not pay on time?

g.)    When is this financial issue due to end?

The second step is to consider each option you have to repay the debt.

1). If you are incapable of repaying the small debts such as hospital bills not covered by insurance, utility bills and credit card bills you should contact the business personally by phone, mail or in person and see if you are able to come to a mutual agreement. When it comes to utility bill, skipping a bill or two in a financial crisis is acceptable and the penalty is small. Generally speaking, it is not advised to use cash loans to pay off these small bills. It is always better to negotiate with the utility company or borrow from a family member or a friend.

2). If you are unable to repay large bills such as a mortgage or a vehicle loan, try to get in touch with your creditor and negotiate the terms. Creditors generally have loan modification programs to help clients deal with financial emergencies. This not only helps protect the borrower’s credit history but builds confidence in the lender too. When the lender cooperates with you, make it a point to repay the reduced amounts on time – every time. In order to repay these outstanding debts you should consider delving into your savings, trimming down on your expenses or borrowing from someone to tide you over. Not paying your mortgage, vehicle loan or card bills can lead to serious repercussions later.

3).  However, if you are deep in debt and are finding it difficult not only to repay the debt but also find it hard to meet monthly expenses, you are in serious financial difficulty.  What you need to do here is to take stock of the situation, see what you can cut back on and how you can do to earn a little more. If your card bills are high, consider options such as bad debt credit cards, personal loans and debt consolidation loans to ease the situation. Research the net to get more debt management ideas as well.

Finally, you have to take action.

Following are the options you have to manage your financial crisis:

  • Credit cards – These small plastic cards are the quickest source of cash, though if not handled wisely they can be a pretty expensive proposition. Cards are ideal for small short-term loans that you can repay in a couple of months. Just remember never to spend more than 10 to 15 percent of the total credit on the card. This will enable you to repay the amount in time and with little or no interest, and keep your credit history clean.
  • Emergency fast loan lenders – Fast loans should be your last option. If you are unable to come up with money from another source, and are 100 percent confident of being able to repay the loan from your next month’s salary, only then opt for a loan. The fee could be as high as 35 percent of the figure you borrow.
  • Home equity loans – If you are repaying a mortgage, you will own a sizable part of the property – your equity in the property – you can put this equity up as collateral to get a loan to tide you over.

You have many options to get out of a financial crisis; you just have to choose wisely.

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