Unemployment: Dealing with debt

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NEW YORK (CNNMoney.com) -- Unemployment is at a 25-year high. If you've recently found yourself with a pink slip, here is some advice on how to manage your debt while you're unemployed.

1. Get on the phone

Your number one concern should be to protect the roof over your head. If you have a mortgage and you've just lost your job, call your lender and explain what happened - before you miss any payments.

Lenders are putting together their own plans to help borrowers in danger of defaulting. Citibank for example just began a program that would reduce your mortgage payments to around $500 for three months if you've lost your job. Bank of America, HSBC and JPMorgan Chase have programs in place that could help people.

2. Prioritize your bills

Here's where you really need to prioritize.

First, the bills you want to pay on time include your basic necessities, like food, shelter and your utilities.

After all of that, concentrate on paying the minimums on your credit card if you can to avoid damaging your credit. But be sure to call your credit card companies and let them know about your situation. Creditors may agree to ease loan terms for people who are trying to survive a jobless stint.

If you lost your job and you don't think you can even make minimum payments, you'll want to call those credit card companies and ask to have your payments temporarily reduced or suspended.

You might also seek the guidance of a credit counselor who can help you put together a budget or negotiate with your creditors. You may want to also start researching bankruptcy options.

3. Make your case

If you've lost your job and you have kids in college you may be able to amend your FAFSA to get more student loan aid.

Remember the FAFSA is the document you filled out to get student aid in the first place.

Make sure you have documents that support your job loss - like a pink slip. Go to the financial aid office and ask for a professional judgment review (known in the industry as a PJ).

It's up to the school whether or not to extend more aid, but it can't hurt to ask. Keep in mind that other situations may not entitle you to a professional judgment review - like a foreclosure or the fact your 401(k) assets have shrunk.

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