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Losing your job can lead to some tough financial choices

When Massachusetts residents are considering filing for bankruptcy, it often isn't because they are out of a job. It can be relatively easy to build up large amounts of credit card debt, or other types of obligations, that can lead people to seek a way out and get a fresh financial start. However, if people do become unemployed, then financial pressures can become overwhelming in a hurry.

Depending on the situation, people might be tempted to live off their credit cards for a while if they can't gain employment relatively quickly again, and put off actions such as Chapter 7 bankruptcy for the time being. However, it's worth determining if this is a wise choice in the long run.

The first thing that people ought to do is to eliminate any unnecessary expenses. While spending a few dollars here and there doesn't make a big impact under normal circumstances, eliminating a daily latte or cable television can help to boost your bottom line.

Credit card companies might be willing to work with you and offer you a lower rate or more favorable payment terms, if you are up front with them about your situation. It's better to do that before your debts begin to spiral out of control, however.

In any case, you should work to at least pay the minimum payments on your cards every month. It can be easy to rack up late fees and transform a relatively good interest rate into a bad one.

Even if you do everything you can, it might not be enough. Talking to a bankruptcy attorney can give you even more options.

Source: Market Watch, "6 credit card tips for the unemployed," Abby Hayes, April 9, 2014

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