Hi kids.  So a buddy of mine just got laid off.  He’s in the very early stages of dealing with it.  Right now he is still looking for someone to blame.  It’s a sad situation.  He was supporting his live-in girlfriend who came with a freeloading half-brother with a drug problem and a dog who likes to pee on expensive things.  His folks are down on their luck as well and he was throwing a few dollars to his sister whose still in school and his mom and dad who are trying not to fall further behind on rent.

When I got the news I went into business mode, the way a doctor would if someone told him that they guy two rows over was having a heart attack.  Unlike a doctor though my efforts and expertise were unappreciated.  I was called insensitive and a bunch of other names.  I was reminded that I was still unemployed and the worst possible thing for anyone to imagine was a life that was in any way similar to my own.  Thanks.

But you guys here in Debtor’s Prison need to know what to do when the ax falls.  Because we are emotional creatures its impossible to have the conversation once you actually do lose your job (just like you can’t take Karate lessons once you’re being mugged).  So without further ado here is how you survive a layoff 1) move 2) get unemployment and 3) defer your loans.  More details after the break.

Everyone experiences the loss of a job differently.  What is universal however is the loss of income.  Therefore the first thing you must do is drop your expenses to the level of your new income.  If you’re in debtor’s prison most likely you rent.  The sooner you swallow your pride and move the better you will be financially in the long run.  Break your lease if you can, find a sublet if you can’t.  Move in with a parent, aunt/uncle, high school buddy, whatever.  I would advise against moving in with a significant other – it’s bad for relationship dynamics if you start cohabitation under the cloud of a firing.  As for your stuff, sell as much of it as you can.  If you’re in debtor’s prison you probably don’t have much unless you also have massive credit card debt.  If you DO have a lot of stuff you’re about to become very familiar with craigslist and e-bay because you’re selling it.

Now for you homeowners first let me say congratulations! You have a real asset.  Now might be a good time to roll your student loans into that (that way if you lose your house at least you have a fresh start in seven years once your credit is repaired).  It’s also time to find renters and beggars CANNOT be choosers.  Also this is a volume business.  Three assholes paying $600 a month is better than two saints paying $800 a month.  This is basic math.  There shouldn’t be anything valuable left in your house either once they move in because you sold it and as for damage that’s what security deposits are for.  Now you might be asking yourself where you will be living if your house is full of renters but I believe I covered that in the earlier paragraph.

Next is unemployment.  Get on it.  I don’t care how much you’ve saved or how sure you are you will find another job in a month.  Get in the bread line because its long and you have to be in it for a certain amount of time (depending on the state) before you even get that first crust of bread.  Find out how many months you can be on unemployment before you are cut off.  YES you have to pay taxes on unemployment.  YES you are going to have to save as much as you can out of your bi-weekly check because its not going to last forever. 

Here is the most complicated part.  Of course your student loans.  Defer them.  You have no choice.  I realize interest will continue to acrue.  I know the effects of that are devastating, particularly if you have been aggressively trying to pay down your loans, using money you could have saved for a rainy day such as the one you are currently experiencing.  But that ship has sailed, and that was part of the risk you took when you began paying down your loans aggressively.  What you should have done (and don’t feel bad I didn’t know this either during my brief stint of employment) was to pay the minimum amount on your loans while simultaneously creating an aggressive savings account with the purpose of paying off your loan in its entirety once the account became large enough.  That way if you are laid off you still have that money to work with and possibly use to pay your loans during your time between jobs so the interest does not get out of control.  Finally if it is at all possible, do ANYTHING YOU CAN to make the INTEREST PAYMENTS ON YOUR LOANS.  You should be able to work something out with your student loan representative.

That’s about it kids.  What happened sucked.   It probably wasn’t your fault.  Unfortunately there is no time to deal with the humiliation, heart ache, sense of brokeness and the horrible horrible feeling that you let your family down.  You can work all that out in therapy once you get a new job with good benefits and I encourage you to.  But right now you have leases to break, roommates to find, DVDs and videogames to sell, labor and employment offices to contact and loans to defer.  This is the CPR that must be performed before help, in the form of another job, can arrive.  And unfortunately you live way out in the country.