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Financial Recovery From a Natural Disaster

The busiest hurricane season on record, 2005, caused over $60 billion in estimated insurance damages. That doesn't begin to include individual financial losses due to accidents, injuries, lost jobs or recovery-related scams. Consumers with existing debt management issues are at higher risk for financial losses during natural disasters. But creating a simple plan that addresses debt management ahead of time will ensure that your finances remain steady during a difficult recovery period.

"Disasters and emergencies can push debt-burdened people over the financial edge," says Amida Mehta, director of marketing for ClearPoint Financial Solutions, a consumer credit counseling service. "Our counselors work with disaster victims to help them recover from debt management issues, and to prevent them from occurring in the future."

The key to a smooth recovery is preparing beforehand. Residents in disaster-prone areas stock emergency food and water. This same advance thinking applies to finances. Store important documents in a portable, durable and fireproof file box. Make sure to include: copy of driver's license, Social Security card, proof of residence, insurance policies, wills, deeds, birth and marriage certificates, tax records, and photos and descriptions of larger valuables. In the event of an evacuation, take the box with you.

If possible, set aside savings now for an emergency fund. Building a savings plan into your budget creates financial reserves to help you get back on your feet when facing any emergency. Working with a consumer credit counseling service can help you create a realistic plan for managing debt and building savings, no matter what your income level.

When disaster progresses to recovery, there are measures you can take to regain and maintain your financial stability. (Tip: Print this list to store in the box with your important papers).

• Only give out your Social Security number to verified agencies that can provide assistance.
• Regularly monitor your credit report, which a consumer credit counseling service can help evaluate, to safeguard against identify theft.
• Check with your bank to ensure accurate account activity, to update your information, and for a supply of checks.
• To maintain effective debt management, contact creditors as soon as possible to have statements forwarded to your new or temporary address. Creditors will sometimes make concessions for victims who are forced to relocate, and include a "disaster victim" note on your credit file.
• If your circumstances do not improve before creditor concessions end, contact creditors again to discuss appropriate debt management based on your individual hardship. Consumer credit counseling services can help negotiate with your creditors.
• Ask your employers if there is an Employee Assistance Program.
• Notify your state's employment commission of your employment status and ask out about special job considerations for disaster victims.
• Register with the Social Security Administration for victims benefits.
• Seek assistance from local churches, Salvation Army, United Way, Social Services, FEMA and the American Red Cross.
• File insurance claims immediately. The sooner the paperwork is completed, the sooner you'll be on the road to recovery.
• Contact the Internal Revenue Service, which allows individuals to deduct some casualty losses from the year the loss occurred, or through an immediate amendment to the previous year's return.
• According to consumer credit counseling services, open new credit only as a last resort. Taking on additional debt in a shaky post-disaster economy is a big risk.

Remember that the consumer credit counseling services from ClearPoint Financial Solutions can offer sound financial advice if you have been displaced due to a natural disaster or other emergency situation. A reputable consumer credit counseling service is an unbiased source of information for exploring all possible options for debt management. Don't delay on addressing these debt management issues-the longer you wait, the more time and energy it takes to resolve financial concerns. Call and ask about ClearPoint Credit Counseling Solutions to learn about their consumer credit counseling services and receive one-on-one advice on how to resolve debt management issues today.

ClearPoint Financial Solutions, Inc.^TM (formerly Consumer Credit Counseling Services of America, Inc.) is a national nonprofit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1980, ClearPoint has helped over one million individuals establish effective debt management and achieve financial security.