During a crisis, every decision can feel overwhelming.
If you’re facing a sudden hardship — like a divorce, injury or job loss — even asking for financial help can feel like another burden.
But the decisions you make during a traumatic event could leave you dealing with long-term financial consequences.
That’s what happened to Kelly White, a social worker from New Hampshire and a TPH Community member, who separated from her now ex-husband in 2009.
The couple decided to delay filing for divorce when she found out she had cancer and needed to stay on his insurance. But after she was unable to continue working and the bills started piling up, she said they chose to declare bankruptcy.
“I was exhausted — my body was tired, my brain was tired, my heart was tired,” White said. “At that point, even my few thousand dollars in credit card debt seemed overwhelming.”
That decision ended up affecting her credit — including her ability to rent an apartment — long after the divorce papers were signed.
“Were I to do it again, I’d do it differently,” she said.
If you’re experiencing a financial hardship and aren’t sure how you’re going to cover your bills, we have ways to avoid debt, even during the tough times.
How to Avoid Debt During a Hardship
Whether it’s a job loss, divorce, medical emergency or other crisis, hardships can happen unexpectedly and can result in serious financial consequences.
Here are some ways to help you weather rough waters while keeping your financial boat afloat.
1. Budget for a Reduced Income
If you were getting by on two incomes, the sudden loss of one of them — whether it’s due to a layoff, an injury or separation — could cause real anxiety when it comes to figuring out how to cover your bills.
It’s not the time to panic. It is the time to budget.
Quickly assess where you are financially by writing down your current income and expenses on one page. Need some help getting started? Follow these five steps to manage your money on a reduced income.
2. Enroll in a Credit Card Hardship Program
Credit card companies don’t typically advertise that you can adjust your payment schedule or even stop paying your bill if you’re experiencing temporary but serious financial issues.
A credit card hardship program is basically just a payment plan for your credit card — albeit one that’s probably more forgiving than your current payment schedule.
Programs vary by lender, so it’s important that you call yours to ask about the terms and explain why you need temporary relief. It might not be the most pleasant call, but it’s better than emerging from a crisis only to find a mountain of credit card debt on the other side.
3. Ask for Help With the Rent or Utility Bills
An unexpected medical bill or home repair can be a burden to pay on its own, and the consequences can radiate into other parts of your financial life.
If you’re unable to pay a bill due to unforeseen circumstances — a medical emergency, death in the family or loss of a job — an organization called Modest Needs may be able to help.
This non-profit provides small grants to deserving individuals who would otherwise be capable of paying their expenses and aren’t eligible for other kinds of social assistance.
To learn about how to apply and find out which expenses are covered, check out how Modest Needs can help you pay your bills.
4. Find a Side Gig to Cover Expenses
If the hardship is directly related to your income — like you just got fired — you could be scrambling to come up with enough money just to keep the lights on and food on the table.
If you’re looking for another job right away, we have plenty of tips for conducting a job search.
It never hurts to know what’s out there. Work-from-home job opportunities abound. Find yours in our portal, updated every weekday.
But if you need to find something in the immediate future, a side hustle could provide a quick way to make money — and could be a way for you to explore a new career.
And if you’re too overwhelmed to start thinking about how to get cash rolling in, we found plenty of easy ways to make extra money.
5. Negotiate Medical Bills
An emergency medical situation can be overwhelming, confusing and exhausting — not to mention financially draining.
As hard as it may be to believe, healthcare institutions aren’t out to intimidate you and take all your money — at least, not in the beginning. And almost all of them will accept less than the full amount owed — but you have to ask.
Follow these step-by-step strategies when you can’t afford your medical bills.
6. Set Up a Plan for Your Student Loans
A crisis is not the time to stick your head in the sand, particularly when it comes to student loans.
Unlike credit card debt or medical debt, debt from federal student loans can follow you until death. And if you default on a student loan — that happens after you’ve missed payments for 270 days (or about nine months) — the government can collect on the debt by garnishing your wages or income tax return refunds.
But if you lose a source of income suddenly and you’re facing payments on your federal student loans, you can ask for a break.
If it’s all too much, student loan forgiveness or discharge are options for wiping out your debt. But they’re not quick fixes: These programs typically take years and have specific qualifications.
None of these options will wipe out your student loan debt and can pile on additional interest, but they can give you the necessary breathing room after a tragedy to gather yourself financially and get back on track.
And surviving a hardship with less debt will make the next crisis that much easier to weather.
Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.