The couple was devastated. They had no other income and little savings. They didn't have enough money to survive. Mary panicked, which caused Jay to reactive negatively. They became tense and argumentative. Jay felt as if he was letting down his family for not being able to provide financially for them.
After one especially tense discussion, Mary went into their bedroom to pray and felt God tell her she needed to encourage Jay, to let him know she had complete confidence in him. Then she recalled the Bible verse: "For God hath not given us the spirit of fear; but of power, and of love, and of a sound mind" (2 Timothy 1:7, KJV). She realized her panic wasn't helping the situation; it was making it worse.
So Mary approached Jay and apologized for her reaction to their financial situation. The tension dissipated and together they were able to form a game plan.
The first thing they decided to do was quit spending money. They realized it would be easy for them to go into a denial mode and continue spending, assuming Jay would find another job before the severance package ran out. Instead, they opted to spend only on their immediate needs such as diapers and food, and cut back on unnecessary expenditures such as going out to eat. They also agreed not to use their credit cards, knowing how easy it would be to run up the balance and deceive themselves into thinking they'd pay it off once Jay found another job.
Next, Jay and Mary made a list of what bills needed to be paid first and stuck to the list. They prioritized their bills into essential and nonessential categories. They paid the essential, or survival, bills first—their mortgage payments, utilities, and food. Then they made their car payments and paid the auto and medical insurance. With the remaining money, they concentrated on the nonessential bills—those that have no immediate consequences if paid late: credit cards, medical bills, newspaper and magazine subscriptions, life insurance, health club, and clothing.
They discovered by paying their survival bills first, they were able to stretch their money further.
The next step Jay and Mary took was to contact their creditors, including their mortgage and auto lenders, to update them on the situation. By communicating with their creditors, they discovered most were willing to work with them. They were able to establish a repayment plan they could afford, which allowed them to make partial payments and not be considered delinquent.
To ensure their creditors were on the same page as they were, Jay and Mary took notes of each conversation, listing the date and person with whom they spoke. Then they asked for their agreement terms to be sent to them in writing before they sent any money.
Finally, they joined their church's special financial planning program, as well as a debt management company, which helped them reduce their payments and lower their interest rates.
In the meantime, Jay continued aggressively seeking new employment. He was able to receive unemployment, and by the ninth month of being without work, Jay found a new job. Jay and Mary knew it was going to take time to catch up on their past due bills, but they were able to avoid bankruptcy.
How to survive it.
• Have a constant savings.
• Pray to God to help you cope with it.
• Don’t overspend your income.
• Communicate with your creditors on repayment plan.
• Join a special financial planning program and dept management company.
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