Okay, the worst has happened and you are now displaced and out of your home. Hopefully it will only be for a short period of time but in some cases it might take weeks and years to get your financial life back to some version of what it was before the disaster.
The first thing I need to get through to you, and I need for you to not just glance at what I’m about to tell you, but really let it sink in.
You need to let go of your worry about your credit rating at this time of crisis. It is of lesser concern and less importance right now. At this time we need to concentrate on the basic necessities of life and that means safe shelter, food, clothing, warmth, etc.
Don’t ignore my warning and advice here. You must put any concern over your credit rating aside. People who don’t make terrible mistakes and find themselves in a dark place financially when they blow through their available cash to make payments they can’t afford but are still displaced.
A disaster changes everything. It changes your income, relationships, mental health, and emotional stability. You will go through moments of depression and hopelessness, and that’s entirely normal. But don’t let the fog of depression allow you to make critical financial mistakes that can drive you down and suffer more loss than you have to.
Locate Your Important Items
Remember those important items I told you to gather, the list is below. Now I need for you to locate those items you took with you and keep them secure and close at hand.
Spending Money After the Disaster
We don’t know how long it is going to take for you to get back on your feet and get a regular income coming in again. That really depends on the size and scope of the disaster.
But let’s assume it is going to take a while. In that case, every dollar you spend will be like the most precious dollar you ever had. Spending it means it might not be replaced easily so you need to make sure that money is spent with a plan and a clear intention.
Think about those dollars like water you are carrying for a long dessert ride. You’ll need the water to last across the dessert but unless you know exactly how wide that dessert is, you’ll have to ration it to use it sparingly.
This is a touchy subject. The advice I’m going to give you is practical and logical but for some it might feel against the grain.
Put all your needed expenses on one or more credit cards, not debit cards. Try to preserve the cash you have with you, and in the bank, for things you can’t use a credit card for.
If you find yourself in a situation where you need to use a credit card and can’t afford to pay it off quickly, you may just need to use the credit card and run up the balance. Sometimes getting food and diapers is more important.
We can deal with the accumulated debt after the crisis is over.
Just be aware that big balances may lead to unaffordable debt and if you are unable to pay the amounts due as agreed it can lead to having your account placed in collections and negative marks on your credit if you miss payments. That’s not the end of the world though. It’s just something else we’ll have to recover from.
Rest assured that once you get back home or back on your feet, we can deal with the resulting debt. A natural disaster is an understandable reason for a financial bump in the road.
This is why I wanted you to understand that your credit score is of lesser importance at this time. You need to do and spend what you have to and get through these early days of the disaster recovery and we’ll deal with the debt later.
I’m sure your intention is to repay all that you spend, just spend consciously and carefully.
Start Calling Creditors
As soon as you realize that your income will be interrupted and that it will be a period of time before you can get back to a home again, I want you to start calling your creditors, and particularly your mortgage company if you have one.
If you don’t have a monthly mortgage statement or coupon book with you, search the Mortgage Electronic Registration Systems (MERS) or call them toll-free at (888) 679-6377 to find the company that services your mortgage.
Call all your secured and unsecured creditors and ask them to put a note on your account that you’ve been displaced or your home has been damaged or destroyed by a disaster. Some creditors will respond to large disasters and have special payment forbearance programs in place to give you 90 days to get back on your feet. Not all will.
Even those generous programs only give you 90 days so we’ll still need to come up with a longterm plan. This is only a temporary breather.
Keep a log or record of the creditors you inform, the name of the representative, and the date and time you called. This might come in very handy later.
If you have access to email through your phone, tablet, or computer, just send yourself an email documenting this information after each call. If you need it later it will be easy to lookup in your email account.
Call Your Property Insurance Companies
If you have property insurance claims, for home, care, or even business property, you should contact your applicable insurance companies and let them know what has happened. Depending on your policies they may be able to provide you with some financial assistance or even a transportation or housing benefit.
In the pre-disaster guides (index at bottom) I told you to put a hold on your mail. If you have not done that, do it now. We don’t want the post office to leave important financial documents in a mailbox you can’t get back to. The post office will hold the mail for free for up to 30 days. You can always go to your local post office to pickup your mail if you are displaced for a long period of time.
If your home is so damaged that you can’t live in it, consider calling your utility companies, including your cable company and alarm company, to suspend service. It’s one less bill you’ll have to be on the hook for.
Cell or Mobile Phone
If you did not talk to your cell or mobile phone carrier about extending your calling plan before the disaster, do it now. You are probably going to be using your phone a lot right now and we don’t want you to go into overage minutes which are the most expensive. It will needlessly run your bill way up.
Call the customer service number on you wireless phone, generally it is 611. Talk to the representative and explain your situation and that you need to at least temporarily expand your minutes since you are going to probably be using your phone a lot.
Speaking of your phone, don’t let the charge go below 40% without charging it if you can. Sometimes access to electricity to charge devices can be difficult so keep your phone or computing devices topped off.
Start Registering for Recovery Programs
If the disaster that impacted you was fairly large, there may quickly be government programs and agencies, like FEMA (Federal Emergency Management Agency), that can assist you. You can find details about how to apply by visiting this page.
The lines will only become longer and the delay greater for recovery programs as time goes on. Register as early as possible and get your application in the front of the queue. Once you register, tell others where they can go for help.
You may be surprised by the amount of assistance that you may be eligible for. That’s a good thing.
Some are ashamed or embarrassed about applying for public benefit programs like food stamps. Get over it. It’s a program you’ve probably paid into for years through your taxes and now is the time you need it. Don’t let your pride get in the way of properly taking care of yourself so you can recover faster.
Take Lots of Pictures
If you can get back to your home and it is damaged, take a lot of pictures of the damage using your smartphone or camera. The more pictures you can have to document the situation, the better. When dealing with creditors or collectors later on a picture can truly be worth a thousand words.
While You Are Back at the Property
If you are back at your property and you are not able to occupy your property at this time or it was destroyed, I want you to keep an eye open for any documents laying around that have your account information, social security number, or other personal or financial information that might be taken by someone. Pick them up and dispose of them.
We need to protect your identity and financial information from looters and crooks. Opportunists materialize after many tragedies.
Contact Your Employer
When possible, contact your employer and ask what the income situation is going to be following the disaster. If the business is destroyed and they will not be rehiring, then we need to know that early to factor it into recovery plans.
If the employer is ready to pay you as soon as you can return to work then we need to make returning a plan as soon as possible.
Most people are ill prepared for a financial interruption and are only one or two paychecks from bankruptcy so resuming your income as soon as possible, even part-time, needs to be a priority.