MISSISSIPPI STATE -- Hurricane Katrina caused several thousand Mississippians to lose their jobs along with their homes, and that sudden loss of income is still being felt.

Food, water, medical care and temporary shelter were the first priorities in the days and weeks following the storm. Once basic survival needs were met and things were a little less desperate, residents who lost everything turned their attention to more long-term financial matters.

Bobbie Shaffett, family resource management specialist with the Mississippi State University Extension Service, said more than 64,000 Mississippians filed for unemployment by the end of September. Offices that had received about 100 jobless claims a day jumped to 1,000 claims a day after the storm.

Without income, debts and living expenses that once were manageable now may be beyond many people's ability to pay.

“Don't put off contacting creditors if you find you cannot pay bills for a while,” Shaffett said. “The sooner you contact the institutions you owe, the more likely they are to work with you. Some arrangements have already been made, and consumers just need to contact their creditors to finalize these.”

Many banks and lending institutions automatically deferred payments on loans to customers in the federal disaster areas. Others are willing to do so upon request. It is important to note that even when a forbearance on a loan is granted, interest does accumulate and the missed payments will have to be made up.

“Be sure to get any agreements to defer payments in writing and make sure you fully understand what is required,” Shaffett said. “Payment reprieves can be a tremendous help now as people are struggling to put their lives back together.”

By now, those affected by the storm should have determined their financial position, noting income, savings and access to money. Next, contact all financial institutions with which business is conducted.

“Maintain debt payments or have them deferred,” Shaffett said. “Try to work only with reputable lenders and those you have done business with in the past. Meet in person with the banker or lending institution to discuss your financial options at this time.”

As much as possible, avoid accumulating more debt during recovery. Do not exceed spending limits on credit cards, and remember the high cost of cash advances. Avoid alternative lending sources that offer pay day and car title loans.

Shaffett said a financial budget is a solid tool for planning in the best of times, and when times are tough, it can be a financial lifesaver. Cut all spending to a bare minimum once critical needs are met. Calculate all income sources and make a plan for spending it.

The Extension Service offers a publication called When Your Income Drops. It outlines a priority list for spending on a limited income.

“Food and shelter for your family should be the first priority with the income you have available. After those two are taken care of, hard choices may need to be made on which bills you must pay first,” the publication states.

Consumers might rank creditors by the degree of risk involved in nonpayment. Of second priority are utilities, insurance and automobile loans. Third priority are credit cards, outstanding debts, finance companies and other loans, while last priority are medical and retail bills.

“Contact all of your creditors before your bills are due, explain your situation and offer to negotiate new repayment terms. If a creditor agrees to new repayment terms, uphold your responsibility by meeting the terms you agreed to. If any changes occur that affect your repayment plan, contact your creditors immediately,” the publication states.

Banks are dealing with their own challenges since the storm. Keesler Federal Credit Union is headquartered in Biloxi and had 13 branches on the coast. They struggled to provide services to members in the days after Katrina. Four branches are still unable to open, but as the telephone network returns to normal, more services will be restored.

In a letter to members, the credit union said account information and deposits are safe.

Hancock Bank, an institution headquartered in Gulfport, had 86 branches operational again by mid-September.

“To assist our friends in the time of need, we are announcing a program of assistance that will help our customers get back on their feet as soon as possible. This program will provide individuals and businesses with immediate relief so that we can all begin the difficult task of rebuilding our lives and businesses,” the bank states on its Web site.

Hancock Bank is waiving fees for their customers using other banks' automatic teller machines and Internet bill payment fees, and for a time immediately after the storm waived fees for domestic wire transfers. They have a special offer for reordering checks, and promise to work with customers with needs involving certificates of deposits, overdrawn accounts, mortgage payments and commercial loans. They also offer a rebuilding loan at a discounted rate.

Another Mississippi bank, BancorpSouth, said in published reports that it expects the storm to bring third-quarter losses of about $9 million. BancorpSouth also had 13 locations in the hardest hit counties, and 6 percent of the bank's outstanding loans were in the area primarily affected by the storm.