Carrie Schwab Pomerantz

As our economy experiences one of its most dramatic downturns in decades, the American worker is bearing much of the pain. According to the United States Bureau of Labor Statistics, 4.1 million people joined the ranks of the unemployed in the last year. That brought the national unemployment rate up to 7.6 percent -- and of course that number is much higher in many parts of the country. If you're one of the people who has lost their job --or whose job is in jeopardy -- the key is to take action. Here are some things you can do to help ease the financial pain.

Review your severance package before you sign. If you are lucky enough to be offered a severance package, don't sign without reading. According to Federal law, you have 21 days to sign a severance deal (and seven days after that to change your mind). You may be able to negotiate a better deal, particularly if you're an experienced manager or an executive level employee. And be sure you understand the terms. Are you giving up any rights? Are you signing a non-compete clause? Look online for some guidance, or talk with an attorney.

Apply for unemployment. Almost all wage and salaried workers are covered by the federal-state unemployment compensation program. Chances are good that if you find yourself out of work through no fault of your own, you qualify. Eligibility and benefits vary from state to state, so contact your state for details. Typically, your benefit depends on your recent earnings; in California, for example, unemployment benefits range from $40 to $450 per week for up to 26 weeks (though federal legislation has extended that duration for some workers).

Take advantage of your COBRA rights. Most workers can continue to be covered under their employer's health insurance plan for up to 18 months after being laid off, thanks to the COBRA legislation of 1985 (and most states have mandated an extension of that; California allows you to continue coverage for an additional 18 months). And Congress has just sweetened the deal by way of the recent economic-stimulus plan: If you lose your job between Sept. 1, 2008 and Jan. 1, 2010, the federal government will subsidize 65 percent of your COBRA premium. Of course you might be able to afford doctor visits and medication without insurance, but a serious accident or illness could be a financial disaster. It's critical to stay insured!

Carrie Schwab Pomerantz

Carrie Schwab Pomerantz is a Motley Fool contributor.

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