Stimulus Plan Provides New Options for Laid-Off Americans

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Bills.com experts offer 9 steps to take if you are laid off

In the midst of a tough year for U.S. employment, U.S. leaders have passed the economic stimulus law aimed to get the economy moving and relieve the pain of the more than 3.6 million Americans who have lost their jobs since early 2008, with nearly 600,000 of those jobs cut in January alone.

While some have found new positions, the nation's unemployment rate stands at 7.6 percent, and many experts anticipate more job cuts. Ethan Ewing, president of free online consumer portal Bills.com, has nine suggestions for those who have been laid off to understand their best actions, as well as how the stimulus law aims to help.

1.    Negotiate smartly. If you have any reason to suspect your company might do layoffs, keep an ear to the ground to be aware of the severance packages being offered in your company and others. If you are laid off, negotiate for a layoff package just as you would for a salary. Ask if you can cash in vacation, sick or personal days; determine how long insurance will run; and look into extension of any other benefits.

2.    File for unemployment. Employees who were laid off should qualify for unemployment benefits from their state. File as soon as possible, because it could take several weeks to receive a check. Contractors and part-time workers are ineligible to receive unemployment benefits. Stimulus update: The new stimulus law increases the amount of unemployment benefits and continues the extension that allows people to receive benefits for 33 weeks instead of the old 26 weeks. In addition, unemployment benefits will not be taxed up to $2,400. And for those who need food stamp assistance, the maximum amounts were increased by the law.

3.    Talk it out. Tell others what you are going through so they can commiserate -- and perhaps refer you to your next job. If possible, find a support group to get you out of the house for coffee and mutual advice, or at least join an online support group for advice and networking.

4.    Do not sign up for COBRA immediately. You have 60 days after leaving a job to apply for COBRA, and it applies retroactively. You might get a job within those 60 days. If not, you can submit your notice to continue coverage on day 55. Make sure to set aside the amount of the first premium just in case. Also find out what it would cost to be added to a spouse's insurance policy or to purchase an individual policy. Typically, COBRA is an expensive option, best for heads of household or those who cannot qualify for individual coverage due to pre-existing conditions. Stimulus update: The stimulus law included a subsidy to cover 65 percent of the cost of COBRA premiums for up to nine months for workers laid off between Sept. 1 and Dec. 31, 2008.

5.    Maintain old contacts. Write thank-you notes to your supervisor and key colleagues, enclosing your contact information. With luck, they will keep you in mind if they hear of an appropriate opportunity.

6.    Prime the networking pump. If you have not joined online sites such as LinkedIn, consider doing so. Create a professional profile that mentions your most recent experience. Update your resume. Attend networking events in your career area. Write down your professional contacts' information and take it home with you. When possible, obtain personal e-mail addresses (rather than work addresses alone) for your most valued colleagues so you can stay in touch no matter where they go.

7.    Tighten your belt. Without a paycheck, perspectives shift. Focus on must-pay bills. Cut out other costs, whether cable TV or magazine subscriptions. Generate extra cash by means ranging from a yard sale to selling an extra car. Student loans can likely be deferred while the borrower is out of work. Those who anticipate having trouble paying a mortgage should talk with the lender about options. "If you absolutely cannot pay the bills after significant budget-tightening, seek out a reputable debt resolution firm to discuss options," Ewing said. Stimulus update: Americans with an absolute need to replace a vehicle can receive a credit for sales tax paid on a new car purchase.1 The law included funds to weatherize homes to save energy costs; it remains to be seen exactly how that provision will be implemented.

8.    Leave retirement alone. Many people reflexively reach for a 401(k) withdrawal form when laid off. "But remember that early withdrawals come with income tax and penalties," Ewing cautioned. "Your nest egg is probably already cracked from recent stock market upheaval; avoid tapping it unless absolutely necessary."

9.    Stay positive. Easier said than done, but get up every day, get dressed and get some exercise. Dedicate time every weekday to networking, applying for jobs and attending work-related events.

"The news these days is all about the recession, but every recession does come to an end eventually," Ewing said. "Stay professional, stay calm and stay prepared so that you can survive whatever the job market throws your way."

About Bills.com (http://www.bills.com)
Based in San Mateo, Calif., Bills.com is a free one-stop portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages and other loans. As the online portal to Freedom Financial Network, LLC, the company has served more than 50,000 customers nationwide since 2002 while managing more than $1 billion in consumer debt. Its RSS feed is available at http://www.bills.com/news_releases/.

Bills.com holds the No. 257 spot on the Inc. 500 list for 2008, and the No. 3 spot on Entrepreneur Magazine's Hot 100 list of the fastest-growing U.S. companies. Company co-founders and co-CEOs Andrew Housser and Brad Stroh were named to the Silicon Valley/San Jose Business Journal's "40 Under 40" list in 2008, and were recipients of the Northern California Ernst & Young 2008 Entrepreneur of the Year Award.

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Aimee Bennett

Ethan Ewing
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