How to Deal With an Unexpected Financial Emergency
If a financial emergency hits while you are in debt, first assess whether you have an emergency fund or savings to cover it. If not, prioritise essential expenses and secured debts, contact creditors to explain the situation, and avoid taking on new high-interest credit. If you are under debt review, contact your debt counsellor immediately before any payment is missed.
Key Points
- Use any emergency fund first before borrowing.
- Prioritise essentials and secured debts.
- Contact creditors early to explain the situation.
- Under debt review, call your counsellor before missing a payment.
Assess what you have
Before borrowing, check whether you have an emergency fund, savings, or items you can sell to cover the cost. Using your own resources avoids adding debt and interest. Even partial coverage reduces what you need to borrow.
If you have nothing saved, do not panic — there are still steps to manage the situation.
Prioritise essentials and secured debt
In a crisis, direct limited funds toward essentials (food, shelter, electricity) and secured debts (home and car) first, because these protect your basic stability. Unsecured creditors can wait while you stabilise, but do not ignore them — communicate.
This prioritisation protects the fundamentals of your life while you recover.
Communicate early
Contact creditors before you miss a payment to explain the emergency and discuss options. If you are under debt review, call your debt counsellor immediately — proactive communication can protect your restructuring. Avoid turning to high-interest short-term lenders, which deepen the crisis.
Acting early and honestly almost always yields better outcomes than avoidance.
Frequently Asked Questions
Worried That Your Debt Has Become Unaffordable?
Debt Guidance can assess your income, essential expenses and debt commitments to determine whether debt review may be appropriate.
Reviewed by Carolina Guevara Harris
Registered Debt Counsellor · NCRDC3152
Last updated: 17 September 2025
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