Where to find cash after a disaster

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2011 has been the costliest year for natural disasters. If you’re hit with an emergency and need to find cash fast, here are some resources to look into. I’m Clark Palmer with your Bankrate.com Personal Finance Minute.

In gravely disastrous times, Uncle Sam can help. According to the Federal Emergency Management Agency’s website, disaster assistance for temporary housing, home repair, medical and burial expenses, vehicle damage and clean up costs is provided. To qualify, you must live in a FEMA-declared disaster zone and file a claim with your homeowners insurance first.

A second source for cash is your family. While your family lender doesn’t have to charge the full market interest rate, they have to charge you something for the transaction to be considered a loan and not a gift that could have tax and estate planning implications.

A third option is tapping your retirement or college savings accounts. There are tax penalties of around 10 percent for both, but the better option between the two is the 401(k). The IRS reports that 401(k) holders can borrow up to half of their account (a maximum of $50,000) tax-free, but funds must be repaid within five years in most cases.

To learn more on this and other financial related topics, visit Bankrate.com. I’m Clark Palmer.