Personal Finance
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Disaster strikes. Now what?
After the worst, eight ways to get back on your feet financially.
September 15, 2005: 8:25 AM EDT
By Ellen McGirt, MONEY Magazine

NEW YORK (CNN/Money) - So you've been struck by disaster. Now that the worst is over, and you're safe, start thinking about rebuilding your financial future. These eight tips are a good place to start.

1. Get yourself safe, then get busy.

When disaster strikes, it's tempting to hunker down with the proverbial shotgun and protect the homefront. Delaying is not only dangerous, it can be costly.

"People tend to not want to leave their homes, either during or after a storm," said Miami-based certified financial planner Helen Salazar-Realini. "They'll sit there, without utilities or water, and wait for help instead of getting themselves organized elsewhere."

If the damage is widespread, you may be out of touch for days, and have trouble getting cash and information or start processing essential insurance claims.

Accept immediate short term relief -- including cash from agencies, relatives, friends or employers if you've escaped with nothing -- and make use of any electricity, phones or Internet service you can find.

If a loved one is sending cash, but you have lost your identification, Western Union can help: To be able to receive money without a valid ID, a test question and an answer have to be set by the sender before making the transaction.

2. Get to a bank. In a pinch, any bank.

Your bank is prepared to work with you even if you don't have any identification, thanks in large part to the Patriot Act, which mandated alternative identification procedures in times of crisis.

Expect to be seriously quizzed. "They'll ask you information about yourself that only you would know," explains John Hall, spokesperson for the American Bankers Association. "An identity thief may know three or four things, but you'll be asked for many more."

Your trip down memory lane will include past addresses, previous employers, past or current accounts, and other life history.

What if your bank and all its branches have been destroyed? You can open a new account at another bank using the same alternative identification procedures and transfer your balance, even without your old account number.

"It would help if you had a check or something with your old account number on it," says Hall, "but in some cases you can open a new account and transfer your balance in a matter of hours or days."

3. Got income?

As soon as possible, check in with your employer and find out what their disaster plan is, if any. If the business is temporarily shut down, "you'll need to know if you're going to be paid and for how long," says John D. Fromularo, a financial advisor with Wachovia Securities.

If the business is intact, but your life has been disrupted, "You'll need to ask if you can extend your income through sick leave pay, vacation pay or any employer-paid emergency services available to you."

And if you're injured as a result of the disaster, you'll need to initiate any employer-sponsored disability coverage and find out how long you'll wait for any benefits. If you were injured on the job during a disaster, find out if you're eligible for workman's compensation.

4. Apply for unemployment if necessary.

If you're out of work, you can apply for unemployment at any FEMA Disaster Recovery walk-in centers that will appear near any disaster area. You can also call FEMA at 800-621-FEMA, or visit them on the web at

5. Contact any bank or institution to which you owe money.

If you've been the victim of a disaster, your institutions need to know immediately.

"Banks have been asked by regulators to do many things to help," says Hall. "But you have to let them know about your situation." Financial institutions will waive ATM fees, overdraft fees, and delay delinquency notices to credit bureaus for anyone in a disaster.

Then, contact all creditors -- mortgages, student loans, credit cards, personal loans, car loans - and ask for a payment holiday or for a reduced payment schedule, giving you some financial breathing room until you get on your feet.

6. Get free advice.

The Financial Planning Association offers pro bono financial services to disaster victims across the country.

"The program was initiated after we were approached by the American Red Cross following the September 11th attacks," says FPA spokesperson Beau Ballinger. "It now extends to victims of natural disasters and military personnel as well."

Contact the Financial Planning Association at or 800.647.6340 or the Red Cross for more information.

7. Get to the library.

Every form you may need to fill out -- FEMA applications, credit applications, unemployment and benefits claims -- can be done for free at your local library. And for families who need to be in touch, free Internet access also means sending "I'm safe," messages to loved ones. Best of all, you have a bevy of free experts who can help you research whatever your issues are.

"What displaced people desperately need it is knowledge and information, and that's what public libraries do," says American Library Association president Michael Gorman.

Libraries can help relocated families get information on jobs, local health resources, and relief options.

8. Seek long-term disaster relief.

The Small Business Administration offers three types of loans for private sector losses due to official disasters. Home disaster loans are extended to homeowners or renters to replace damage to both real property and personal property.

Business physical disaster loans are available to businesses and non-profits of any size to repair or replace damaged real estate, equipment, inventory and supplies.

Finally, economic injury disaster loans are for businesses with no access to other credit sources, and offer low-interest loans for small businesses and agricultural cooperatives through the disaster recovery period. Head to for more information.


For more disaster recovery tips, click here.

Click here for more on Hurricane Katrina and the aftermath.  Top of page

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