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Juggling your bills when your paycheck goes on furlough

(MoneyWatch) Furloughed federal employees, contractors and others affected by the government shutdown are facing tough financial decisions. Since they are going to miss a paycheck -- or two or three -- many of them are placing calls to creditors asking for help in deferring or lowering payments on mortgages, credit cards and other loans. They need to decide which bills to pay and when.

The good news is that many lenders say they will work with federal employees to keep mortgages, credit cards and other debts in good standing. These are 5 steps to keeping your finances afloat while dealing with a gap in income:

Apply for unemployment

Most federal employees can file, although the process may be complicated. Normally, unemployment offices seek verification from an applicant's former employer, but since those offices are closed, many applicants are having to provide documentation, like W-2 forms and pay stubs.

Federal employees should also be mindful that if, when the shutdown ends, they are paid retroactively for lost wages, that they will have to pay back any unemployment benefits they received.

Prioritize your bills

If you don't have enough savings to cover all your monthly bills, ask yourself "What bills must be paid first, and which ones can be stretched out a bit?" says personal finance expert Gerri Detweiler, with Credit.com. Generally it is most important to pay auto loans and mortgages, she says. If you don't pay, not only is there a risk you could lose your home or your car, but those lenders are likely to report bills more that 30 days overdue to credit rating agencies, damaging your personal credit.

In contrast, student loans are also easily managed during a crisis period. Borrowers paying off federal student loans can apply for deferment or forbearance, neither one of which negatively affects credit.

See if hardship assistance is available

TD Bank announced it will offer furloughed customers in good standing up to $1,000 in an interest-free cash advance, as well as mortgage assistance and waived late fees on credit card payments.

Citizens Bank and Charter One Bank (subsidiaries of RBS) said they will offer furloughed employees assistance in a number of ways, including allowing early access to CDs without penalty, waiving/rebating checking account and credit card fees, and personalized help with loan payments.

Meanwhile, when contacted by CBSNews.com, Citibank (C), JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC) all said they are prepared to help borrowers on a case-by-case basis, and invited them to contact the bank to see what accommodations could be made. And the Credit Union National Association said that many credit unions have also stepped up with offers of emergency loans, low-fee or interest free payroll advance loans and extensions on mortgages and other debt payments.

Furloughed workers with car payments could also find some relief. Hyundai and Nissan are offering federal workers extensions on their auto loans, provided the loans are with the automakers themselves and not with an outside bank.

Shawnee Swinton is a New York-based civil rights investigator with the U.S. Department of Health and Human Services, and she's furloughed. "Just like every other American, I am a borrower. I have creditors."

She called Municipal Credit Union Tuesday to ask what, if anything, it could do to help her stay current on her loan. "I was assured by a supervisor that they would be willing to work with federal employees that were furloughed," she said.

Swinton was told she could refinance her loan, or take a three-month deferment while interest still accrued. She was grateful for the accommodations her credit union made, but still worried. "I still have phone, cable, cell phone, Internet, rent, food, credit cards."

Government shutdown: Is there a way out?

Only reach out if you are sure you need the help

Detweiler warns, "Sometimes when consumers call credit card companies asking for help because they have become unemployed, the card issuer closes their account. I don't know whether that will happen under these circumstances, but it's always a possibility to keep in mind."

Sometimes all you need is the minimum payment

This is certainly true of credit cards. But it may apply to other bills, like insurance payments. "With your credit cards, keep in mind that all you have to do is make your minimum payment to avoid a late payment on your credit report," Detweiler said. "While it's not ideal to pay less than the full balance, if it's necessary to do that for a couple of months, at least you won't damage your credit with a late payment that lasts seven years."

Detweiler said borrowers would be well advised to get a copy of their credit report. Knowing who reports and how often can help in deciding which bill to pay first, and which creditors should get a phone call.

For Swinton, who plans to reach out to her credit card companies next, it is just time to get this whole thing over with. "We are a big part of the economy. And we want to work. We just want to go back to work."

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