Dollar Scholars Foundation

Preparing for and Recovering from Financial Shocks · Lesson 1 of 2

When Income Stops: Your First 30 Days

A 30-day plan for a layoff, cut hours, or a government shutdown: decide which bills come first, apply for help, and avoid costly traps.

  • About 15 min
  • Quiz questions: 6
  • Last checked: szeptember 2026
  • Builds on: Money Smart for Adults, Module 4: Your Spending and Saving Plan (Section 2, When Money Is Short)

Parts of this lesson are not translated into your language yet, so they are shown in English.

In this lesson

What you will learn

  • Decide which bills to pay first when income drops, using a worked example.
  • Apply for unemployment insurance and other help in DC, Maryland, and Virginia.
  • Call landlords, lenders, and utilities to ask for a payment plan before a bill goes unpaid.
  • Avoid high-cost loans and scams that target people in a money crisis.

How this connects to class: In class you learned to rank bills by what happens if you do not pay them. This lesson turns that skill into a 30-day action plan for a layoff, cut hours, or a federal shutdown, with places in DC, Maryland, and Virginia to apply for help.

Words to know

Unemployment insurance (UI)
Weekly payments from a state, for a limited time, to workers who lose their job or hours through no fault of their own.
Furlough
A period when an employer, such as the federal government during a shutdown, tells workers to stop working and does not pay them.
Hardship plan
A short-term agreement with a lender to lower or pause your payments because your income dropped.
Forbearance
Permission from a lender to pause or lower loan payments for a set time. You usually still owe the paused amount later.
Payment arrangement
A plan with your electric, gas, or water company to pay a past-due bill in smaller parts over time.
Public charge
A test in immigration law that looks at whether a person is likely to depend on government help. It mainly affects people applying for a green card.

Your 30-day plan at a glance

Income can stop without warning. A layoff, cut hours, an injury, or a federal shutdown can cut a paycheck in half. The fall 2025 federal shutdown lasted 43 days, the longest in U.S. history, and left many DC-area workers without pay.

Yaw and Abena Mensah live in Hyattsville, Maryland. Yaw was laid off from his delivery job. Abena still works part-time as a home health aide. Their take-home pay dropped from $5,000 to $2,500 a month. This is the plan they followed.

  1. Days 1 to 7: File for unemployment. Check your final paycheck. List every bill, its amount, and its due date.
  2. Days 5 to 14: Rank your bills. Before each due date, call every lender and utility you cannot pay in full.
  3. Days 7 to 21: Apply for food, energy, and rent help. Replace lost health coverage.
  4. Days 21 to 30: Make a smaller spending plan for next month. Keep asking for your unemployment payment each week.

Week 1: File for unemployment and check your last paycheck

Unemployment insurance (UI) replaces part of your lost pay for a limited time if you lost your job or hours through no fault of your own. Apply in the state where you worked, even if you live in another state. Apply in your first week. It is free.

Each week, you must ask for payment, report any money you earned, and usually look for work. If your hours were cut but your job did not end, you may get a smaller, partial payment.

To get UI, you must have been allowed to work in the U.S. when you earned the wages, and you must be allowed to work now. People with an ITIN (a tax number from the IRS) but no work permit usually cannot get UI. If you were paid in cash or treated as a contractor, apply anyway and bring proof of your pay. The state decides.

Final paycheck. In DC, if your employer ends your job, your final pay is due by the next working day. In Maryland and Virginia, it is due by your next regular payday.

Health coverage. If you lose health insurance from your job, you have 60 days to sign up for a new plan through DC Health Link, Maryland Health Connection, or Virginia's Insurance Marketplace.

Example

Which bill comes first? The Mensahs' worksheet

Abena's $2,500 had to cover the family until Yaw's unemployment payments started. They listed every bill and ranked each one by what would happen if it went unpaid: losing their home, heat and lights, food, or the car Abena needs for work.

The Mensahs' bills this month, in order
Bill (in order)AmountTotal so far
1. Rent$1,600$1,600
2. Electric and gas$170$1,770
3. Food (a shorter list, plus a food pantry)$400$2,170
4. Car insurance$150$2,320
5. Phone and internet (cheaper plan)$60$2,380
Left for other debts$120

$2,500 income − $2,380 for needs = $120 left

Three bills did not fit: the car loan ($350), a credit card minimum ($75), and a store card minimum ($40). The car loan came first of the three, because the lender can take the car. So Abena called the lender before the due date and asked to move one payment to the end of the loan. The lender agreed. The $120 then covered both card minimums ($115). They also canceled streaming and a gym membership ($45).

Notice two things. Rent and utilities came before the credit cards, even though card interest is high. And the most important step was a phone call, made early.

Call before you miss a payment

Lenders and utilities can do more for you before you miss a payment than after. Most lenders do not report a late payment to the credit bureaus until it is 30 days past due, but late fees can start sooner.

  • Car loan or personal loan: ask to move a payment to the end of the loan (a deferral), or to lower your payments for a few months.
  • Credit cards: ask for a hardship plan with a lower interest rate or payment.
  • Mortgage: ask your servicer (the company you send your payments to) about forbearance, and talk to a free HUD-approved housing counselor.
  • Federal student loans: ask your servicer about an unemployment deferment or a payment based on your income. Never pay a company for this help.
  • Utilities: ask for a payment arrangement. In DC, the electric company cannot shut off home service on days when the forecast is 95°F or higher or 32°F or lower. This only delays a shutoff. You still owe the bill.
  • Rent: talk to your landlord before the rent is due. Read our renters' rights lesson to learn your rights if you cannot pay.

Hello, my name is [your name], and my account number is [number]. I lost my job on [date], and I cannot make my full payment due on [date]. What hardship options do you have, such as moving a payment or lowering it for a few months? Please send me the agreement in writing. May I have your name and a reference number for this call?

Write down the date, the person's name, and what they agreed to.

Help to apply for in DC, Maryland, and Virginia

Dial 211 in DC, Maryland, or Virginia to find local help with food, rent, and utilities.

  • Food: apply for SNAP (food benefits): in DC through the Department of Human Services, in Maryland through the MarylandBenefits website, and in Virginia through CommonHelp. For free food now, call the Capital Area Food Bank's Hunger Lifeline at (202) 644-9807 (en español).
  • Energy bills: in DC, apply to the Department of Energy and Environment (DOEE) for LIHEAP (the federal Low Income Home Energy Assistance Program) and the Utility Discount Program. In Maryland, apply to the Office of Home Energy Programs. In Virginia, apply for Energy Assistance through CommonHelp. Some programs take applications only at certain times of the year.
  • Rent: DC's Emergency Rental Assistance Program (ERAP) helps some renters with very low incomes pay past-due rent. It takes applications only at certain times; check erap.dhs.dc.gov. In Maryland and Virginia, call 211.

SNAP rules changed in 2025. A federal law made them stricter. More adults ages 18 to 64 who are able to work and do not have a child under 14 in their household must now work or join a work program about 20 hours a week (80 hours a month) to get SNAP for more than 3 months in 3 years. People who get unemployment benefits, or who have applied and are following the unemployment rules, are usually excused. Refugees and asylees can no longer get SNAP because of that status alone. U.S. citizen children can still get SNAP even if a parent cannot.

A note for immigrants. A new federal “public charge” rule took effect on September 18, 2026. It lets immigration officers look at more kinds of public benefits, used on or after that date, when some people apply for a green card. Before you apply for benefits, get free advice from an immigration attorney or a representative at a nonprofit accredited by the U.S. Department of Justice. Do not go to a notario. In the U.S., a notary is not a lawyer. See our lesson on scams that target newcomers.

Government shutdowns: federal employees and contractors

Many DC-area families depend on federal paychecks. A shutdown affects federal employees and contractor employees in different ways.

What to expect during a federal shutdown
QuestionFederal employeeContractor employee
Back pay after it ends?Yes, by a 2019 law.Not guaranteed.
Unemployment during it?If furloughed, you can apply for UCFE (unemployment for federal workers) in the state where you work. If you must work without pay, you usually cannot.You can apply for regular state unemployment if your hours stop or are cut.
After back pay arrives?You will most likely have to repay the unemployment benefits.Does not apply.

Back pay helps only after a shutdown ends. Until then, rank your bills and call lenders early. In past shutdowns, some banks and credit unions offered payment breaks or low-cost loans to federal workers, so ask yours. If you work for a contractor, ask whether you can use paid leave.

Watch out

Crisis traps: costly loans and fake help

When money is short, offers of “fast cash” appear everywhere. A typical payday loan charges $15 for every $100 you borrow for two weeks. That equals an annual percentage rate (APR) of about 391%.

$15 ÷ $100 × 365 ÷ 14 days × 100 = about 391% APR

Maryland allows at most 33% a year in interest on small loans, and DC also has strict limits, so loans like this are likely illegal there, even online. Virginia allows some short-term loans. It caps interest at 36% a year, but lenders can also charge a monthly fee of up to $25. Check a lender's license on NMLS Consumer Access (nmlsconsumeraccess.org). A car title loan puts the car you need for work at risk.

Also watch out for:

  • Anyone who charges a fee to file your unemployment claim. Filing is free on the state's own website.
  • Calls or texts saying you won a “relief grant” but must pay a fee first.
  • Work-from-home jobs that send you a check and ask you to send part of the money back. The check will bounce, and you will owe the bank.

Learn more in our lessons on high-cost loans and spotting scams.

Tip

Plan for taxes on unemployment

Unemployment benefits count as income on your federal tax return. To avoid a tax bill later, you can ask your state to hold back federal tax from each payment. You can usually choose this when you apply, or later by giving your state IRS Form W-4V. Free tax help is available at VITA sites; see our lesson on filing for free. When a regular paycheck returns, rebuild your savings with our emergency fund lesson.

Key takeaways

  • File for unemployment in your first week, in the state where you worked. Filing is free.
  • Pay for housing, utilities, food, and the transportation you need for work first.
  • Call lenders and utilities before the due date. Ask for a hardship plan and get it in writing.
  • Federal employees get back pay after a shutdown by law. Contractor employees are not guaranteed it, but they can apply for unemployment.
  • Loans that cost hundreds of percent a year make a crisis worse. Look for free help first.

Check your understanding

Answer the questions, then select Check my answers. Get 5 of 6 right to complete this lesson. This is practice: there is no time limit, and we do not keep your answers.

Question 1 of 6 Marisol's hours were cut. This week she can pay only one of these bills in full. Which should she pay first?
Question 2 of 6 The Mensahs have paid for rent, utilities, food, car insurance, and phone. They have $120 left, but they still owe a $350 car loan payment and two card minimums ($115). What should they do first?
Question 3 of 6 Ana lives in Virginia but worked in DC until she was laid off. Where should she apply for unemployment benefits?
Question 4 of 6 Dev is a federal employee in Washington, DC. He is furloughed during a shutdown and gets unemployment benefits (UCFE) for three weeks. After the shutdown ends, he gets his back pay. What most likely happens next?
Question 5 of 6 Grace works for a private company that cleans a federal office building. A shutdown stops her work. Which statement is true?
Question 6 of 6 Luis lives in Maryland. A website offers him $400 today if he pays back $460 in two weeks. What is true about this offer?

Go further

Trusted websites where you can learn more. These links go to other websites that Dollar Scholars does not run.

This lesson is general financial education, not legal, tax, or financial advice. Rules and amounts change, so check important numbers with an official source.