by Jeff Burke

Created on: February 20, 2008   Last Updated: December 14, 2009

When everything goes wrong, how do you survive from day to day when you are working on getting your income back up to even be able to form a new budget? You can't make a new plan or make promises to creditors until you get your job situation and income back on track. To be in a place mentally and emotionally where you can secure a good job and make a new budget, you must be able to survive the day, month, or year that it will take to rebuild your cash flow.

You are not alone in your struggle. The entire nation is in a state of upheaval right now. Everywhere you turn there are negative reports of unemployment, company closings, and depressed real estate values. One out of seven houses are vacant with 25 % of those being second homes. Defaults on credit cards, car loans, and mortgages are rocking Wall Street.

What do we do when everything goes wrong and we're slowly stripped of possessions one by one? During the Great Depression some who lost their holdings jumped out the windows of high rise buildings to their death. Some may self-medicate, get addicted, and self-destruct. Others become bitter toward people in general and isolate themselves. The number of people turning to crime as a solution is on the rise. Know this, negative behaviors are not a solution. Negative actions create negative reactions and a downward spiral.

There are seven things you should do when you hit bottom financially:

1. RE-EVALUATE YOUR FRIENDSHIPS. Relationships are re-shuffled as fair weather friends avoid you because they know you are hurting and don't want to expose themselves to hurt. You need encouragement. Some people are takers, some are givers. It's easy to figure out who's who when you're broke. Don't put yourself through the pain of hanging out with people who want to "fix" you. You don't need a judge or a sermon, you need a friend.

2. SIMPLIFY YOUR FINANCES. Debt is a cruel taskmaster. If you don't pay, they come and get their stuff. Depending on your situation, it might be best to let them have it all and start over. A bankruptcy may be necessary to protect present and future assets. See a good attorney who specializes in this area.

My advice is to adopt a pay as you go policy. If you don't have the money, don't buy it. You don't need a $30,000 car to get where you're going, a $2,000 car will get you there fine. A lifestyle change will serve you well even when your money comes back.

If there are tax issues, don't procrastinate. See a tax attorney as soon as possible. If you

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