Personal & financial assistance options for those impacted by the Deepwater Horizon Oil Spill
As workers and businesses negatively impacted by the Deepwater Horizon Oil Spill begin a long and uncertain recovery, the value of seeking personal and business financial management advice is becoming more apparent. The oil spill was only the latest in a string of hardships to challenge the viability of Louisiana’s coastal communities and economy. Increased foreign competition, aging fleets, inefficient distribution streams, and a terrible parade of hurricanes since 2005 mix with the oil to create instability that can challenge even the most organized and fiscally prepared family or business.
With tax-season upon us, it is vital recipients of claims payments and Vessel of Opportunity income manage their finances to plan for the lump-sum payments the IRS will require. The IRS has established a Gulf Oil Spill Information Center and a hotline specifically for those impacted by the oil spill (866-562-5227). The special services phone line will operate weekdays from 7 a.m. to 10 p.m. local time. Claims payments and Vessel of Opportunity income are taxable. If you need legal help (with taxes or otherwise), please contact Southeast Louisiana Legal Services BP Oil Spill Outreach (504) 340-1381 ext. 29 (Spanish: 504-529-1000 ext. 239, Vietnamese: 504-529-1000 ext. 4).
GNO, Inc.’s recent focus group involving over 75 individuals and families involved in various aspects of the region’s fishing industry revealed short- and long-term uncertainties over personal and business finances, which are instructive to workers and businesses, as well as organizations assisting them.
In the short-term, cash management strategies are very important, particularly as workers and businesses are receiving bulk payments for assisting BP and/or emergency compensation or final payments through the GCCF claims process.
The Louisiana Small Business Development Center at Nicholls State University is assisting businesses with Cash Flow Projectionf fr the final payment offer from BP or GCCF.
Tips for creating a personal and/or corporate cash management plan for the next 18 months, from Management Advisory Services:
- Determine a monthly cash outlay budget, detailing planned expenditures and debt repayments. Include a provision for a contingency cash outlay each month.
- Identify potential and viable sources of cash inflows for each month.
- Identify monthly cash deficits.
- Develop a resource and action plan to resolve the monthly cash deficits. Ideally, this plan should not anticipate any recoveries from economic loss claims as recoveries may take an extended period of time.
- Begin to work the plan to obtain the needed liquidity for the next 18 months, including contacting affected creditors.
- Consult professional advisors, where necessary develop a realistic survival program tailored to your circumstances.
“Indeed, effective cash management is the most important thing that individuals most impacted by the oil spill can be doing to protect their families and maintain their household for the long haul,” offers one financial consultant working with individuals and businesses impacted by the oil spill. “Taking proactive actions affords the best options to lay the foundations for possible recovery from this disaster.”
With the future profitability of damaged fisheries still uncertain, workers and businesses should consider maximizing the benefit of any compensation or BP payments received by seeking out advice for increasing saving, strategic personal or business investments, and/or debt reduction techniques.
First, it is recommended that if you are financially impacted by the oil spill to assess your financial strengths and weaknesses and seek out professional financial counseling services to develop a strategy that best suits your needs and goals.
Seedco’s Recovery Resources for Impacted Businesses and Workers lists organizations providing financial counseling among other services for impacted individuals and businesses.
Credit counseling is also a recommended short-term focus. “The temptation to just ‘charge it’ is so great among workers and businesses right now with no steady income, it threatens to undercut any gains made from BP payments,” observed one credit counselor interviewed by GNO, Inc. Among other entities, ASI Federal Credit Union has instituted a free credit counseling service along with relief options, specifically for those impacted by the oil spill.
Household and mortgage counseling is also recommended and available throughout the impacted area to assist individuals with free foreclosure prevention services. Such counseling will help you determine if you are eligible for special loan modifications or refinancing.