Michigan readers no doubt followed the coverage of the devastation brought by Hurricane Sandy. While the state was not directly affected by the storm, the experience of those who were in its path has left many considering the sufficiency of their own disaster plans. A large-scale natural disaster can quickly deplete an individual's savings and lead to high levels of debt. There are, however, a number of efforts that can reduce the costs associated with such an event.
While it is usually good advice to limit one's use of credit, in the case of a natural disaster the opposite applies. By putting essential expenses on credit, it is possible to keep as much cash on hand as possible. There may be instances in which only cash is accepted for payment, and having access to cash can become imperative in the weeks following a disaster.
One step that should be undertaken as soon as possible is to contact one's creditors. Explain the situation, and ask that they place a note on your account that outlines your current circumstances. Many creditors have disaster programs in place that can help you by deferring payments or reducing interest rates or late fees for borrowers who have been adversely affected by a disaster.
While there are many ways to minimize the financial burdens that result from a natural disaster, there are also cases in which the debt accumulated in such an event is simply overwhelming. This can be the case when one loses not only their home and personal property, but also loses a job because their employer was also affected. In this type of situation, the best option may be to investigate one's personal bankruptcy options. A successful bankruptcy can help Michigan residents get a fresh financial start through the elimination of a large portion of consumer debt.
Source: The Huffington Post, "How to Survive Debt After a Natural Disaster," Steve Rhode, Nov. 5, 2012