Protecting your finances after a hurricane hits

The 2013 hurricane season in Miami-Dade County is expected to run from June 1 to November 30. Hopefully, the season will pass without inflicting too much damage. However, if a major storm does occur, it is important to learn what you need to do to recover.

In the immediate aftermath of a serious hurricane, most people are rightly concerned with cleaning up debris, repairing storm damage and replacing lost essentials. However, if you have suffered serious damage, it is just as important to take steps to protect your financial future. An interruption to your income (and, therefore, your ability to pay your bills) could cause damage to your credit score and could considerably disrupt your ability to access the credit you need to rebuild. Consider the following strategies:

  • Contact your insurance company: The first thing you should do is assess the damage to your property and contact your insurance company. Make a claim, and try to get an estimate from your insurer regarding how long you will have to wait for payment. This should make it easier to plan for expenses.
  • Investigate disaster assistance programs: There are a number of financial assistance programs available to hurricane victims. Some are government backed, while others are funded by private nonprofits. See what you qualify for, and don't be embarrassed to ask for assistance. These programs were created with the express purpose of helping people like you.
  • Get your credit report: Do this before you start incurring major storm-related expenses. Your credit report will provide an accurate picture of your financial state before the hurricane hit, which may help you negotiate with creditors if your credit score takes a hit during the rebuilding process.
  • Make a budget: Your expenses while you are rebuilding will likely be much higher than they were before the storm. In addition, you may experience a disruption in your income if your place of employment was damaged in the storm. Set realistic expectations both about the short-term expenses of replacing clothes and personal items and paying for temporary housing, as well as the long-term expenses you will face while rebuilding.
  • Talk to your creditors: As part of your budget, you should identify how much money you will have available each month to pay back existing debts. Be proactive, and contact your creditors to explain your situation and ask what they can do to help. If they agree to do anything - like waive late fees, adjust your minimum payment or temporarily suspend your obligation to pay - be sure to get confirmation in writing.

If you do get into financial trouble, know that help is out there. In many cases, filing for bankruptcy can be the best solution. A completed bankruptcy will discharge old debts to help you get a fresh financial start. After a major disaster, a clean slate might be just the thing you need.