Having lived through several weeks or even months of unemployment, you’re probably more than happy to get back in the work force and start bringing in a paycheck. You probably won’t be the only one happy about becoming employed again. All the creditors and collectors you’ve dodged during unemployment will likely come again with their hands outstretched and waiting for payment. You could easily feel like your paycheck is being tugged in all sorts of directions, but you should make a plan.
After returning to work, you’ll probably have a lot of responsibilities to catch up on. If you got severance from your last job, received unemployment benefits or had access to savings, you may have been able to stay current on your debts. If not, then make a list of all the payments you need to catch up on. You could use the bills you’ve received during unemployment or start collecting them as they come in the mail. Then, write down the past due amount for each debt and the amount of delinquency, e.g. 30 days past due or in collections.
You should create a budget based on your expected salary. You should create a budget even if you don’t expect to have enough money leftover to catch up on debts. A budget will likely keep you from overextending yourself, something that’s easy to do when you’re back to work for the first time in several months. You should make sure you include all your monthly expenses and some extra money that you can save every month.
You should get ready for the phone calls and letters from collectors. Once your creditors learn you’re back at work again, they’ll likely resume calling you and sending letters. That’s if they ever stopped. You may be able to keep your employment a secret for awhile, but if any of your creditors learns about your new job, they’ll all soon figure it out because it will likely show on your credit report. If you’re proactive about a plan to pay back your debts, you’ll probably know exactly how to respond to creditor and collector calls.
Consider settling debts. If your debts have become severely past due, it may be impossible to get caught up. On the other hand, you may be able to come up with enough money to settle with your creditors. Before you mention settlement to any creditor or collector, you should contact a debt settlement company or assess your ability to come up with the funds to settle your debts.
Resist the temptation to spend or go into more debt. Being back at work is probably a huge relief. Now that you’re back at work, you may feel compelled to start buying all the things you had to go without while you were out of work. Try not to let the feeling of material deprivation get you in trouble. Use your budget to decide how much money you can afford to spend on things like clothes and entertainment. You should keep this kind of spending to a minimum until you get your debt under control.