Q My company just filed Chapter 11. Is there anything I should do to reorganize my personal finances while the company reorganizes in bankruptcy court?


A Sad to say, your question isn't uncommon these days, as more companies battle for survival during a recession that is getting worse by the month. Chapter 11 is a classic tactic for buying time. Of course, at work the best thing to do is focus on what you can control -- doing a good job -- and not worry (too much) about what you can't. But when it comes to our personal finances, two critical issues are the pension and the health care plans. It pays to spend the time getting familiar with both. The Department of Labor has a brief sheet about the topic at www.dol.gov/ebsa/newsroom/fsbankruptcy.html. Among the questions the agency recommends that employees working at a company in Chapter 11 ask are:

• Will the plans continue or will they be terminated?

• If the pension plan is to be terminated, how will accrued benefits be paid?

• If the health plan is to be terminated, how will outstanding health claims be paid, and when will certificates of creditable coverage (showing, among other things, the dates of enrollment in your employer's health plan) be issued?

• Will COBRA continuation coverage be offered to terminated employees?

At home, the personal finance steps to take are the ones we're all embracing to boost savings and reduce debt. But the actions have an added urgency. If you have trouble imagining where those savings will come from, it's time to focus on frugality: Changes in your spending habits add up. Many techniques are time-honored and updated for the Internet age. They work. Clip coupons. Watch for sales. Comparison shop for Internet and cell phone service and cable TV packages. Unplug where you can. Turn down the thermostat and wear sweaters. Shop at thrift stores and consignment shops.

You always end up paying less with planning. For instance, go to the grocery store with a menu for the week. And then get out of there.

Finally, develop contingency plans. Plan ahead while you have a job. I'd run through various scenarios, figuring out where you can take even more drastic actions to shore up your household budget. Tap into your network to get them thinking about future jobs for you. Make sure family and friends understand what's going on. And good luck.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org.