NEWS RELEASE

Media Contact:
Renee Beauregard 303-400-3456
Ken Scott 713-682-1382, pager 1(800) 901-4418

Consumers United Association
Offers Tips for Surviving Unemployment

Denver, CO - April 4, 2003 -The U.S. Bureau of Labor Statistics reports new claims for unemployment benefits rose 38,000 last week to the highest level in nearly a year with 445,000 applications for jobless benefits filed the week ending March 29.

Finding employment may be more difficult than expected as the Bureau reports that in February, nearly 1.9 million people had been unemployed for 27 weeks or more.

In addition, bankruptcy has increased 23 percent and foreclosure rates are 0.49 percent of all loans up from 0.28 percent the previous year, a further indication that people are experiencing financial difficulties.

"Extended unemployment and subsequent reduced income (because of the competitive job market) are among the top five major causes for financial difficulties," said Renee Beauregard, executive director, Consumers United Association (CUA). "Many people have lost other financial resources, such as retirement funds and home equity, furthering their financial dilemma."

CUA offers these tips for surviving unemployment.

Benefits. Take advantage of all benefits that you have coming. File for and collect all unemployment and severance benefits. You may meet income, assets and other eligibility guidelines to obtain public assistance.

Creditors. Contact your creditors sooner rather than later. Do not wait until you are behind on payments. Let them know your financial situation is temporary. Most will be willing to work with you to reduce or suspend interest, temporarily lower minimum payments or offer other concessions until you return to work. Make sure to write your creditors so there is a physical record of the contact. You may also have unemployment insurance included in your card agreement.

Home. Secured debt such as your mortgage should be paid first. Meet with your mortgage lender in person if possible, explain your situation and try to work out special payment arrangements while you are unemployed. Lenders are much more likely to work with you if you are up front about your financial situation and when they know it is a temporary situation. If you are already significantly delinquent with your mortgage and/or overextended because you have borrowed significantly against your home, seek assistance from a housing counselor.

Resources. Learn as much as possible about the financial resources you have available through credit unions or banks. Investigate low income housing programs, credit counseling and other nonprofit agencies that provide services to people in crisis.

Bare bones budget. Sit down with all family members and take a hard look at where you are spending your money. List all fixed expenses such as mortgage or rent, utilities, health insurance, child support and others. Set priorities for your expenses by listing payments in order of importance. This will help you know what to pay first when money is short.

Reduce expenses. Cancel cable television, plan less expensive meals, use coupons, lower the thermostat on your furnace, wash and dry full loads of clothes, eliminate unnecessary car trips and anything else you can think of to save a few dollars. The reductions may not seem like much but will add up quickly and provide extra money until you are once again employed.

Keep retirement money intact if possible. Do not withdraw money from your 401(k) account or other retirement accounts unless it is absolutely necessary. Not only are you jeopardizing your retirement, you will also pay steep fees and tax penalties to withdraw the money early.

Contingency Plan. Develop your personal contingency plan for dealing with extended periods of unemployment. Consider part-time employment, contract work and other income options along with understanding where you will be financially and what you will do if you are unemployed for three months, six months, etc.

Consumers United Association (CUA) is a nonprofit consumer advocacy association serving consumers in Colorado. Our mission is to improve the financial lives of consumers by providing financial education and advocacy. CUA offers services and resources to aid consumers in the resolution of consumer problems and provides a united voice for consumers in the legislative arena. For more information visit www.cuacolorado.org.