Joseph* is a 45-year-old aircraft technician who is married with three children. He has worked for 15 years in the same company, getting promoted and obtaining salary increases at regular intervals. His current salary is $4,000 a month, a level at which he can look after his family though he doesn’t have much left over for savings.

One day, he is told that he has been retrenched and his world starts to crumble. He has to think about putting food on the table and paying for his children’s school expenses.

Joseph also has to deal with a car loan as well as topping up his CPF account to handle the mortgage repayment on his HDB flat.  But he is not confident about getting another job at his age and is feeling the stress. His wife doesn’t work, adding to the pressure.

What should he do?

For Joseph, being in debt can be terrifying after he has been retrenched.

The first thing he should do is to contact his creditors to assess the possibility of stopping his debt repayments or lowering them temporarily until he is able to get back on his feet.

Joseph could use his savings to cover household expenses, including looking after his children's education needs. If possible, he should also use his savings to maintain minimum monthly payments that are due during the time when he has no job.

Some experts recommend that after household expenses, people in Joseph's position should pay off their secured loans like mortgages next, and then unsecured loans like credit card debt.

In the meantime, Joseph should assess what his family can live without, to cut down his expenses. It is important for him to stay positive and focus on getting a job. If he needs to do some additional training to secure a new job, it would be prudent to do so.



* Names are fictitious