Advisor Urges Families To Have Plan For Finances In Case Of Disaster

Last week's deadly tornado outbreak in Oklahoma put even more emphasis on the importance of a disaster plan for families. Part of that plan should include your personal finances.

It may be hard to understand, but even if your car or home is destroyed by a tornado, you're still legally liable to make your monthly payment. But there are ways to work with creditors and put those payments on hold.

Home after home was destroyed in Moore. Many of the families who escaped had a plan. For some it was shelter, others fled the area. But what about their finances?

"No one's credit should be affected because they were victim of a tornado," said Jason Barry.

Barry is in investor relations with CFS II, a national debt collection firm. He said families need to consider what they're going to do with their finances after they've made it through a natural disaster.

"If you have everything ready to go, you've saved your family's well being, you've been able to eat and have shelter and water, next you're going to have to handle your financial situation," he said.

Complete Coverage: May 2013 Tornado Outbreak

Barry said homeowners and car owners are still on the hook for their mortgage and car payments, even if they've been destroyed in a storm. But, he said banks and lending institutions will work with you after a major disaster.

As soon as you can, tell your creditors - that's whoever holds your car or home loan, as well as your credit card companies - and, if you're able, continue making your car or mortgage payment, Barry said.

The bottom line, he said that you still owe that money, and if the bank doesn't know you're in a disaster, it could impact your credit report and that's hard to fix.

"If the credit card company isn't kept in the loop, they don't know something's wrong and then they just automatically assume that payments are being missed," Barry said.

Should disaster strike, he said you should, as soon as possible, "Call the bank, the credit card issuer, let them know you've been affected by the tornado, and work on a payment arrangement."

CFS II is offering, free of charge to all tornado victims, their financial disaster recovery service. They'll contact creditors on your behalf and make arrangements to keep your credit report safe.