Recovering from Natural Disasters

No matter how well you plan and manage your finances, a natural disaster can take you off track at a moment's notice. From the devastating hurricane in New Orleans and forest fires and mudslides that plague California to just a bad storm causing a tree to fall through your home, swift and unexpected devastation can take an enormous toll on you emotionally and financially. Consumer Credit Counseling Services (CCCS) agencies urge consumers to prepare financially now - rather than later - by taking some basic steps that can help you recover quickly.

Plan Ahead for Your Safety

Planning what to do in advance includes anticipating what may happen – and what you can do when and if it does. Here are some tips on how to stay safe by lining up the resources you may need in advance.

• Keep a thorough inventory of valuables in your home for claim purposes.
• If you've recently moved, find out which natural disasters are most common in your area, whether it's earthquakes, floods, wildfires, or even extreme cold.
• Research what you can do to lessen the likelihood of damage to your property.
• Know which local disaster relief and emergency resources are available to consumers and how to reach them. Your state or city's internet homepage can provide you with names and phone numbers to keep on hand. And check with your local fire department to obtain information regarding evacuation routes and plans.
• Prepare for the worst—learn where local food banks and emergency shelters are located and how to get to them. Check your phone book for local government agencies that would have this information.

If Disaster Strikes:

• Disaster relief funds and counseling are available through the Federal Emergency Management Agency (1-800-621-FEMA), or your state and local governments.
• Agencies like the American Red Cross can assist you with many of the after effects of a natural disaster.
• If you need legal help, the Young Lawyers Division of the American Bar Association offers free legal aid for lower-income disaster victims.
• For those who can't work, disaster unemployment insurance is available through the state and the U.S. Labor Department.

Maintaining Financial Stability

In the wake of disaster, the immediate concerns are usually focused on damaged property—the house, the car, the office. But financial experts say that other problems can linger long after a disaster strikes. Our CCCS credit counselors suggest some helpful tips to remember:

• Maintain consistent debt management. Still in shock, people often get behind in paying the mortgage, utility and credit card bills. Letting credit-card bills lapse can lead to increased interest rates and late fees. Getting consumer credit help after a disaster also can be extremely important in helping you recover. Nonprofit consumer services such as a CCCS agency can explore your financial options with you.
• Organize important papers. Make sure to gather all the important documents—deeds, wills, bank statements, insurance policies, etc.—make copies and put them in a safe place.
• File insurance claims immediately. The sooner the paperwork is completed, the sooner you'll be on the road to recovery. If your home or car is damaged, contact your insurance company and make a claim.
• Contact the Internal Revenue Service. The IRS allows individuals to deduct some casualty losses from the year the loss occurred, or through an immediate amendment to IRS return the year before.

Again, preparation can lead to peace of mind and help with the financial effects you may encounter if a disaster strikes. And keep in mind, assessing your finances in advance with the assistance of a Consumer Credit Counseling Services agency like CCCS can keep you focused on recovery when the time comes. Getting debt management help at any time, if you need it, from a CCCS credit counselor is an important part of financial health.

Whether or not you've recently experienced a natural disaster, it is important to know what options are available to consumers during those challenging times.