Ten Ways to Handle Losing a Job

Losing a job can be difficult. The job application process can feel overwhelming and the stress of paying your bills may be looming over you. There are several steps to take to ensure that bills are paid, healthcare coverage continues, expenses are reduced, and income continues to come in during unemployment.

Here is a list of ten things you can do after losing your job.

1. Collect Final Compensation from Your Employer

An employee is entitled to a final paycheck and may be entitled to severance pay. State laws require an employer to give an employee a final paycheck within a certain time. Laws vary from state to state, but an employer typically must issue your final paycheck either immediately, the next business day, the next payday, or within a certain number of days. In some states, the employee may be entitled to compensation for unused vacation time.

An employee may also receive additional compensation in a severance package. Under state law, an employer is not required to offer severance pay. An employee has a right to severance pay if the terms of a written contract provided for it, if an employee handbook documented the employer's policy for severance pay, or if the employer made an oral promise. In most cases, an employer offers a severance package in exchange for the employee's agreement to release the employer from legal liability for the termination.

2. File for Unemployment Compensation

Continue receiving income after losing a job by filing a claim for unemployment benefits. In general, state law allows an unemployed worker to collect unemployment compensation if the person became unemployed through no fault of their own, the employment was for a sufficient amount of time, the person earned a sufficient amount in wages, the person can work immediately, and the person is physically capable of working. Check with the unemployment agency in your state to determine specific eligibility requirements.

3. Continue Healthcare Coverage

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986, former employees have the right to continue healthcare coverage for up to 18 months (sometimes longer if a plan participant has a disability) under the employer's plan. The former employee must pay the full premium, but this cost is usually less than obtaining coverage on your own. Within 45 days after losing a job, the former employee will receive an "election notice" and will have 60 days to elect coverage. If elected, the initial premium must be paid within 45 days.

4. Prepare Your Resume

If employed for a long time, it may be necessary to create a new resume that reflects current skills and experience. A resume should be truthful, accurate, and error-free, and should highlight relevant skills. If you have trouble creating a resume, consider hiring a professional resume service.

5. Look for a New Job

You may wish to start your job search right away. Depending upon your skills and the job market, it might take a while to land a new job. Getting straight into your search will help you maintain your momentum and will also help with prospective employers, who often are wary of applicants who have been out of work for an extended period of time.

Conducting a job search can be very time consuming. You should think of your search as a temporary full-time job. Obtaining a new job can be a numbers game. The more contacts you make, the better your chance of finding a job that fits your needs.

These days, most job searches are conducted online. Start by identifying websites that contain the kinds of job postings you are seeking. LinkedIn, Glassdoor, and Indeed are three useful sites, but there may be others that are a better fit for you. When you find a good opportunity, apply promptly and completely. Openings can be filled quickly, especially in a hot job market.

In looking for employment, don't forget to enlist the help of your personal network, including family, friends, former bosses and coworkers, headhunters, and employment agencies. You never know who might be the source of your next employment opportunity.​

6. Look for a Part-time Job

Consider obtaining a part-time job or working odd jobs to bring in income temporarily. Obtaining part-time work or earning income from odd jobs like house sitting or doing handy work will only require a short-term commitment while you search for permanent work. Note that, with some part-time employment, you may have to forgo receiving unemployment compensation. Your state's unemployment agency can explain the eligibility rules.

7. Consider Starting Your Own Business

Do you have a marketable skill that can translate into a profitable business? Sometimes losing a job comes at just the right time. If you have ever thought about starting your own business, this is a good time to give it serious consideration.

8. Eliminate Unnecessary Expenses

While unemployed, eliminating unnecessary expenses will make it easier to live on less income. For instance, get rid of inessential services like gardening, pest control, and housecleaning, and reduce costs even further by limiting clothing purchases and reducing cable programming.

9. Manage Your Debt​

If possible, do not incur new debt. When unemployed, it is important to maintain a strict budget in order to avoid unmanageable debt. Acquiring new debt can easily lead to bigger financial problems than just unemployment.

If necessary, contact your creditors to request a temporary payment arrangement or a suspension of payments after losing a job. For example, in times of high unemployment, some credit card companies are willing to agree to temporary payment plans with no interest. Many creditors would rather grant this type of request than risk a default on payments by the debtor.

10. Deduct Job Hunting Expenses from Your Taxes

The IRS allows job hunters to deduct certain expenses from their taxes if the taxpayer is seeking employment in the same line of work and the expenses exceed 2 percent of the taxpayer's adjusted gross income. Allowable expenses include travel and transportation costs, resume printing and mailing, fees from employment and outplacement agencies, and phone calls to prospective employers.

Download FindLaw's Guide to Job Loss

Finding a job can feel overwhelming and it may be hard to know where to start. For more helpful tips and resources regarding your job search, download FindLaw's Guide to Job Loss.