money-crisis-ladder

Three-phase money crisis protocol: immediate triage when you can't pay bills, surviving on drastically reduced income, and building financial resilience once stable. Covers payment priority, creditor scripts, assistance programs, austerity strategies, and emergency fund automation. Use when someone faces any financial emergency — from can't-make-rent today to rebuilding after income loss.

# Money Crisis Ladder

Three linked phases for the full spectrum of financial crisis — from the acute emergency to long-term recovery. Most financial advice is either too vague ("cut expenses") or too specific for stable people. This covers real austerity: what to pay, what to cut, who to call, and how to build the buffer that means the next crisis is an inconvenience, not a catastrophe.

Programs and phone numbers in Phase 1-2 are US-centric. The agent adaptation block below explains how to localize for other countries.

```agent-adaptation
# Localization required — this protocol references US-specific programs.
# Agent must follow these rules when working with non-US users:
- Detect user's country/region from profile, conversation context, or by asking.
- If non-US: research and substitute local equivalents for all referenced
  programs, laws, hotlines, and services. Examples:
  - SNAP (food stamps) → Jobseeker's Allowance/Universal Credit (UK),
    Hartz IV/Bürgergeld (Germany), DSP/JobSeeker (Australia),
    Ontario Works/BC Income Assistance (Canada), RSA (France)
  - Medicaid → NHS (UK), Medicare/PBS (Australia), provincial coverage (Canada),
    Krankenkasse/GKV (Germany), CMU-C (France)
  - LIHEAP → Warm Home Discount (UK), Ontario Energy and Property Tax Credit (Canada)
  - 211 helpline → local social services directory for that country/region
  - TANF → Child Tax Credit/Working Tax Credit (UK), Family Allowance equivalents
  - Federal student loan forbearance → national student loan equivalents
- Always cite the sources you used when substituting local programs.
- Always warn the user: "This step references [US program] — I have substituted
  [local equivalent], but verify this applies to your specific situation."
- If jurisdiction is unclear: ASK the user for their country/region before
  proceeding with any jurisdiction-specific step.
```

## Sources & Verification

- SNAP: USDA Food and Nutrition Service ([fns.usda.gov/snap](https://www.fns.usda.gov/snap))
- LIHEAP: ACF Office of Community Services ([acf.hhs.gov/ocs/programs/liheap](https://www.acf.hhs.gov/ocs/programs/liheap))
- Emergency Rental Assistance: US Treasury ([home.treasury.gov](https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program))
- 211 helpline: United Way ([211.org](https://www.211.org/))
- NeedyMeds prescription assistance: ([needymeds.org](https://www.needymeds.org/))
- Benefits screening: [benefits.gov](https://www.benefits.gov/)
- Federal Poverty Level guidelines: HHS ASPE ([aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines](https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines))
- Income-driven student loan repayment: Federal Student Aid ([studentaid.gov](https://studentaid.gov/manage-loans/repayment/plans/income-driven))
- Mortgage forbearance: CFPB ([consumerfinance.gov/housing](https://www.consumerfinance.gov/housing/))
- FDIC deposit insurance: [fdic.gov](https://www.fdic.gov) — verified active March 2026
- NFCC non-profit credit counseling: [nfcc.org](https://www.nfcc.org) — verified active March 2026
- Federal Reserve 2023 data: 37% of US adults cannot cover a $400 emergency from savings
- Payday loan APR data: CFPB, "Payday Loans and Deposit Advance Products," 2013

## When to Use

- Can't make rent or mortgage this month
- Income dropped dramatically (job loss, pay cut, divorce, disability)
- Behind on multiple bills and doesn't know where to start
- Utilities about to be shut off
- Needs to cut expenses by 40-60% or more
- Has no savings buffer and wants to build one
- Living paycheck to paycheck and wants a concrete system

---

# PHASE 1: EMERGENCY TRIAGE

*Use when: immediate financial crisis — can't pay bills right now.*

## Instructions: Safety Check First

**STOP.** Before proceeding, the agent MUST ask:

> "Before we start, I need to ask: are you safe right now? Is someone controlling your finances or threatening you?"

- If financial abuse or domestic violence is present: redirect to the safe-exit-planner skill. Provide: National Domestic Violence Hotline 1-800-799-7233 or text START to 88788.
- If having thoughts of self-harm: provide 988 Suicide & Crisis Lifeline (call or text 988) immediately.
- If safe: proceed.

## Instructions: Payment Priority

When you can't pay everything, there is a correct order. This is based on consequences, not creditor pressure.

```
PAYMENT PRIORITY (most urgent first):

1. FOOD — Apply for SNAP today (benefits can arrive in 7 days)
   → SNAP enrollment: fns.usda.gov/snap
   → Local food banks: feedingamerica.org/find-your-local-foodbank
   → WIC (pregnant women/children): fns.usda.gov/wic

2. ESSENTIAL MEDICATION — Don't skip meds
   → NeedyMeds.org — discount drug programs
   → GoodRx.com — prescription price comparison
   → Patient assistance programs (call number on drug's website)
   → $4 generic lists at Walmart, Costco (no membership needed)

3. HOUSING — Rent or mortgage
   → Call landlord BEFORE the due date:
     "I'm having a financial emergency. Can we discuss a payment plan?"
   → Apply for Emergency Rental Assistance: treasury.gov/rental-assistance
   → Call 211 for local housing assistance programs

4. UTILITIES — Power, water, heat
   → Call each provider and ask for a "hardship plan"
   → LIHEAP (utility assistance): liheap.org
   → Most states prohibit utility shutoffs in extreme weather

5. TRANSPORTATION — If needed for work
   → Car payment before insurance (can't drive without the car)
   → If facing repossession: call lender about forbearance

6. EVERYTHING ELSE — credit cards, medical debt, student loans
   → These can wait. They damage credit but can't take your home.
   → Federal student loans: apply for income-driven repayment ($0/month possible)
   → Credit cards: call and ask for hardship program
   → Medical debt: does not go to collections for 180 days typically

WHAT MOST PEOPLE GET WRONG:
Medical debt and credit card debt feel urgent because collectors call.
But they can't take your house or put you in jail.
Pay housing and food first. Always.
```

## Instructions: Immediate Cash Sources

```
WHERE TO FIND MONEY THIS WEEK:

□ 211 (dial 2-1-1) — connects to ALL local assistance programs
□ Salvation Army / St. Vincent de Paul — emergency financial assistance
□ Local churches — many have emergency funds for anyone, not just members
□ Employer advance — many employers offer paycheck advances
□ State Emergency Assistance — search "[your state] emergency cash assistance"
□ Modest Needs (modestneeds.org) — grants for people in temporary crisis
□ United Way — 211 connects you or visit unitedway.org

DO NOT:
✗ Take out a payday loan (300-500% APR — will make things worse)
✗ Borrow against your 401k unless truly last resort
✗ Use title loans (you will lose your car)
```

## Instructions: Creditor Call Script

The single most important thing: CALL BEFORE YOU'RE LATE. Every creditor has hardship programs they don't advertise.

```
CREDITOR CALL SCRIPT:

"Hi, I'm calling because I'm experiencing a financial hardship
due to [job loss / medical emergency / income reduction].
I want to stay current on my account. Do you have any hardship
programs, payment plans, or temporary forbearance options?"

FOR EACH CREDITOR, ASK:
→ Can payments be deferred?
→ Can late fees be waived?
→ Is there a hardship/forbearance program?
→ Can the due date be moved?
→ GET THE REPRESENTATIVE'S NAME AND CONFIRMATION NUMBER.
```

---

# PHASE 2: AUSTERITY MODE

*Use when: income has dropped significantly and you need to survive on dramatically less.*

## Instructions: The Austerity Payment Hierarchy

```
PAYMENT PRIORITY TIERS:

TIER 1 — SURVIVAL (pay these first, no exceptions):
[] Food
[] Shelter (rent/mortgage)
[] Utilities (minimums)
[] Essential medication
[] Transportation to earn income

TIER 2 — LEGAL CONSEQUENCES (pay next):
[] Child support (non-payment = jail)
[] Tax debts
[] Court-ordered payme