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Unemployed? How to Survive

A whole bunch of us, maybe 2 million people in America (we’re still waiting for the numbers), are suddenly unemployed or had our hours reduced to the point where we’re basically out of a job. That includes many in Los Angeles.

I wrote this because I was in the trenches helping people just like you during the Great Recession through clinical programs and lots of hands on experience helping everyday working people, like you. These are some of the unemployment survival techniques I learned from 2008 to 2010.

UPDATE (Mar 29): Unemployment budget for the pandemic. Check my math, but it seems like it could be good news.

DON’T PANIC!

This could turn out to be a short-term, temporary downturn. We’ll see. Let’s hope. Even it’s short, it’s going to be (very) hard for a little while. But don’t panic.

In this guide, there are a bunch of things you should do right away, broken up by topics like money, rent and mortgages, debts, unemployment, friends and relatives, etc.

Before you start reading, you should know that these actions bring some legal implications with them. Don’t take what you read here as legal advice because I don’t know your specific situation. Take these as suggestions–not specific advice.

How long do you have to go?

I wrote this guide to try to help in the short term. These are not sustainable techniques for how to live long term or even for four months!

The idea behind this post is that you might have to survive for the next two to three months without a job and with little money coming in, if any.

I’m hoping that we get out of this mess sometime in the summer. (Don’t get consumed in the doom and gloom right now. Focus on what you can do!!!)

Money

☑️ Get serious about the money you’ve got and what sources are available to you in the short term. If you’re like most of us in Los Angeles, you probably don’t have much in the bank. Still, pull everything you can together and treat it like gold. It’s the only resource you can’t make more of in the short term.

☑️ Make an emergency budget of all the stuff you absolutely need to live for a few months? It doesn’t have to be fancy. Write it on the back of an envelope from some old medical bill if you need to 😈 (I’ll make an emergency budget form and send it out to you if you’re on my email list.)

☑️ Your budget is probably more than you have the cash or unemployment income for. So keep reading this guide for ways to survive.

☑️ Believe it or not, the U.S. Government might be issuing cash checks to help out in the next few weeks, somewhere between $1,000 and $2,000 per adult, but it hasn’t been sorted out yet. Get on my email list for immediate updates!

☑️ If you think you can get a tax refund from last year’s taxes, file it soon! (If you haven’t already done it.)

While the checks from the government might help a bit, they’re not going to go far if you live in Los Angeles, or pretty much any big city. I’ll try to keep you up to date on what’s going on with this as quickly as I can.

Unemployment

Applying for unemployment insurance might help your budget. In California, you’re going to contact EDD, Employment Development Department. As I write this, the EDD is getting slammed with requests. The week before last, they had about 58,000 claims, I bet it’s 10 times that number last week (March 16).

☑️ Get copies of your paystubs! Make sure you have these for getting the most you’re eligible for when file for unemployment. This is fairly urgent because, with things being as they are, many employers are shutting their doors. If you’re able to get them through another service like ADP, you might be in better shape. But get as many copies as you can as soon as you can.

☑️ Learn about unemployment insurance (“UI”), if you’re eligible, it can pay you a few hundred dollars per week, somewhere between $40 and $450, depending on how much you were making before. It’s not much, but your cash is critical.

☑️ File a UI claim with EDD immediately. There are two sites: one for your laptop computer and one for your phone. Whatever you’re reading this on, use that link.

☑️ Don’t go to the EDD offices because they’re all closed do to the pandemic. You have to file online.

☑️ Not everyone gets unemployment, which is kind of a mess – to say the least. Soon, I’ll post more details on what this means and what to do if they deny your claim.

You might have heard that the unemployment insurance offices are struggling to handle all the claims. You’re right, they are. They are also running low on money. But don’t panic. Those offices and their money are backed by the State of California and even the U.S. Government, so we’ll find the money!

Other public benefits

There are a whole bunch of other options you should consider. Usually people call these “welfare” and I know some of you might feel embarrassed going to the store and using something like SNAP, but remember cash is king. If it can stretch out how long you can make it, then use it.

And besides, there hasn’t been a moment like this where so many of us are going through the same experience, so don’t worry about judgment or shame.

Unfortunately, this is one of the areas I know the very least about. I’ll come back once I learn more about them and have something more intelligent to say.

Housing

If you work out your budget (from above), and it’s clear that you’re going to have trouble making rent (April’s rent is due for many of us in just a few days!!) consider this:

☑️ Talk to your landlord or mortgage company. Just because you heard something in the news don’t simply stop making payments. At least not yet. First, contact your landlord or mortgage company and let them know about the emergency situation. Literally nobody in America will be surprised by what happened to you.

☑️ There are a lot of legal things going on right now to try to help you with your mortgage or rent, including a temporary ban on evictions and foreclosures (I will write more on this soon), but make sure you talk to your landlord or bank.

After food, housing is the most important thing you need to protect. Make it your top priority, and don’t try to play hardball with your landlords based on what you’ve read in the news right now. They all know what’s going on too and can’t afford to lose tenants any more than you can afford to lose housing.

Bills

Go back and take a look at that budget I told you to write. On that list, what are the most important bills?

☑️ Know this: obviously utilities like electricity, water, and gas seem like the most important. And they are. However, they are often the most flexible in terms of making payments and are usually prohibited from simply disconnecting your service, at least the short term.

☑️ So it might sound strange, but core bills like utilities (not rent!) may be the ones that you can delay in the short-term–but not forever, obviously. Remember, I’m trying to help you get through the next few months.

☑️ Internet service is even more important than it was during the Great Recession, and often doesn’t get the same kind of protection (well sometimes it does; it’s a little complicated), so you might need to make this an important priority in your list of bills.

☑️ Phone service (cellular) has become a critical thing for most of us. Still, odds are that you’re probably paying way too much for it. Call your provider and see if you can scale down to a bare bones plan. You don’t need to be uploading Tik Tocs all day right now.

☑️ Seriously slash anything you think you can live without for the next two to three months. This might be a great time to go through all those subscriptions you signed up for on your iPhone and Android. Do you really need cable TV? You know you’ve been meaning to cancel some of these unneeded things anyway.

☑️ Things like Netflix are not extravagantly expensive and might help you get through your days a bit over the next few months. But be real with yourself about everything else.

☑️ Think about how you’re paying for bills. As a bankruptcy lawyer, I can’t advise you to incur more debt leading up to a bankruptcy by paying for all your bills on credit cards (and I’m not saying this is where you’re going), but when you’re unemployed, you may need to turn to credit to get you through. Treat cash as something you can’t get back for a few months.

Again, can’t say it enough: this is a survival plan. Not a good way to live long term!!

Debt like credit cards and student loans

Debt has to be paid for with cash. So we need to treat this carefully and try to get creative.

☑️ Paying debt by incurring more–like cash advancing credit cards or going to payday loan lenders–might seem like something you have to do. It’s obviously a really bad idea. The better idea is to contact your credit card companies and let them know what’s going on and ask for help.

☑️ Almost every lender in the country announced they’re willing to help you postpone or reduce payments in the short term. It almost un-American to not try to help you, if you ask me. So contact them and see if you can postpone for a while before making a payment!!!

☑️ CHECK AUTOPAYMENTS!!! You might already have scheduled payments. Stop those immediately because they are going to hit your cash. This could be credit card payments, loan payments, whatever. STOP THEM IF YOU CAN.

☑️ Contact your student loan lenders. Most of them are federally backed and they are usually really flexible about suspending payments. If your student loans are federally backed, you can skip at least 60 days of payments and stop interest from accruing due to the pandemic. Read my update on the temporary 60 day stop on student loans for more.

Taxes

It’s crazy, but tax filings are going to be due in just a few weeks.

☑️ Taxes are due when they’re due, that’s the law, but keep in mind that the Internal Revenue Service is one of the laziest creditors around. (They’re also the fiercest, but it takes them a while to come around)

☑️ The government is likely pushing out the due date for taxes anyway, so stay tuned for more on this! (Subscribe to my list.)

Stay tuned for more on taxes!

Don’t rush to bankruptcy

Just because you’re unemployed doesn’t mean you need to file for bankruptcy. In fact, this might actually be the worst time to file for it, depending on your circumstances.

The best time to file for bankruptcy is when you’ve pretty much hit rock bottom, your situation is stable and projected to improve in the future, and need all the protections it provides. (I’ll post an article explaining soon.)

For some of you, who are entering this unprecedented phase with little cash and a lot debt, bankruptcy might make a ton of sense later in the year to emerge from this pandemic stronger than ever, but for many it’s too early for that.

More updates coming!

I first wrote this quickly on Saturday morning, March 21. I’ll keep revising it over the next few weeks.

Please do consider getting on my email list so I send you more updates and important alerts as they come. It’s not like you’re going to come back to this list every day, so get on the list so the updates come straight to you.

Good luck out there. Remember we’re going to get through this. I hope I can help you!!


Attorney advertising. Now and then I help people file for bankruptcy under the Bankruptcy Code, but I do a lot more than that for my clients. As such I qualify as a debt relief agency, which I’m proud to say. Michael Rice is responsible for the content. 840 Apollo Street, No. 100, El Segundo, CA 90254