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| The Basics | Coping financially when youve lost everything
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A disaster can leave you without a checkbook, ID, credit cards or a job. Heres how to prepare for the worst -- and recover after it happens.
By Liz Pulliam Weston
If you've been through an electrical outage, you've probably experienced this: You walk into a darkened room, flip the nearest light switch -- and stand there momentarily dumbfounded before you realize: Oh, yeah. No juice.
Disaster victims experience a similar disconnect, on a much larger and longer-lasting scale, when trying to deal with their finances. The way they're used to doing things simply no longer works.
Their homes, records, checkbooks, even identification may be destroyed or at least inaccessible. They may have no fixed address for days, weeks or even longer. Phones, ATMs and Internet connections may not work. They may be unable to get to their jobs -- if they still have jobs.
Steps to tackling an overwhelming job
Getting cash, paying bills, contacting creditors and figuring out what to do next can be simply overwhelming. Emergency-response experts suggest taking the following steps:
Take inventory.
This will serve as a to-do list as you determine your next moves. Get a pen and paper and compile lists of:
- Your creditors and insurers with contact numbers, if possible. When you have access to a phone, you can call toll-free directory assistance at (800) 555-1212 to get the consumer help lines for most major lenders and insurers. If you don't know which banks issued your credit cards, you can call the MasterCard and VISA help lines: (800) MC ASSIST and (800) VISA 911, respectively. (Knowing your account numbers makes the process easier, but your lenders and insurers should be able to find your account information regardless.)
- All your bills and the due dates, if known. You can use this to triage whom to call first.
- Any credit cards that are missing and need to be reissued. Even if you dont need the plastic right away, you should report lost cards to prevent a thief from using the account.
- Possible sources of cash. Ideally, you had some cash tucked away for just such an occurrence: a few hundred dollars in an envelope, plus an emergency fund at a bank or brokerage with a balance equal to three to six months' worth of expenses. If not, you may have other options.
In a widespread disaster, portable ATMs may be set up and fees waived. If you have a credit card and can get to a functioning bank, you should be able to get a cash advance (normally a bad idea, given the interest rates and fees involved, but in an emergency these can be worth paying). Some charities may provide small grants, and loans may become more available as the crisis settles.
Related news and commentary on MSN Money
The Federal Emergency Management Agency, or FEMA, offers $5,000 grants for emergency home repairs, for example. The Small Business Administration offers low-interest loans of up to $200,000 to rebuild homes. You may be able to borrow against your 401(k) balance or cash-value life insurance.
If you're insured for the disaster, call your insurer to see if you can get any money upfront for living expenses and other necessities.
Talk to your employer -- if possible.
You need to know if you'll still be getting a paycheck. Some employers continued to pay workers after hurricane Katrina, while others didn't. The amount of help varied considerably. Wal-Mart said it would pay displaced workers for three days; Harrah's, which operates several casinos in the affected area, said it would pay its affected workers for 90 days. If the business is shutting down or if you're unable to get to work, try to find out if you can get access to accrued vacation or sick pay and how long you'll be covered by health insurance and other benefits. If you're out of a job and the disaster is widespread, FEMA typically will set up walk-in disaster recovery centers where you can apply for unemployment insurance, or call (800) 621-FEMA.
Establish an address.
If you can't go home, ask a trusted, accessible friend if you can use her address and landline phone number as a contact point for financial institutions. Banks typically won't issue replacement credit or debit cards to a P.O. Box, mail drop or hotel, and they may be suspicious if the number you give is a cell phone that they can't match to an address.
Again, in big disasters, those policies may be loosened to help victims. A VISA spokeswoman said the credit network's member banks would err on the side of displaced Katrina victims wherever possible, even if it meant temporarily setting aside their fraud protocols.
"We're always concerned about fraud," said VISA spokeswoman Rhonda Bentz, "but we're more concerned about getting cardholders what they need."
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