Despite the fact that the economy is starting to open back up in many areas across the country, Americans will likely continue to struggle to catch-up financially long after returning to work. With roughly 38 million Americans out of work during the pandemic, many will need time to get back on their feet and financial experts recommend that consumers start by discussing their financial situation with their landlords, creditors or banks to see what accommodations they can offer.
Covid -19 Rent Payment Relief
Renters have been under moratorium across the country, but many may need more time when the rent comes due. It is important to be proactive if you believe you will have trouble paying all or part of your rent by contacting your landlord ASAP to work something out. Many landlords may be willing to work with a tenant when contacted, which may start with correspondence stating that you have “been out of work for some time due to Covid-19” and “need to delay or reduce your rent for a month”, with a “your plan to pay them back in the short term”. Your good faith effort may sway your landlord to provide the needed wiggle room to get back on track.
Covid -19 Mortgage Payment Relief
Those who have federally backed mortgages can request a forbearance under the Cares Act by calling their loan servicer. Your servicer’s website should have information you will need to understand the process and a list of needed documents to apply. Private lenders also have Covid- 19 related financial hardship plans they can offer borrowers. Generally, borrowers may ask for a suspension or reduction of payments under the Cares Act and other plans, but be sure to ask if there are fees involved, whether interest rates will be in effect during a suspension, and how the repayment plan will work following periods of forbearance. In the event a forbearance is not possible, homeowners should inquire about financial hardship loans to cover mortgage payments instead.
Covid -19 Credit Card Relief
For consumers having difficulty paying their credit card bills, many companies are offering financial hardship programs related to Covid-19. Most have information available on their respective websites, or can answer questions by telephone regarding accommodations. Even though the economy is starting to open up, many credit card companies continue to work with their customers to waive late fees, lower interest rates, or allow a missed payment or two without accruing interest because of the disruptions caused by the Corona Pandemic.
Covid -19 Student Loan Moratoriums and Beyond
Fortunately, if you have a federal student loan, the Department of Education automatically suspended borrower payments and interest through September 30. If you have private loans, some student loan companies are offering borrowers 90 day forbearances due to Covid 19, but borrowers need to ask. Although interest still accumulates during periods of forbearance, borrowers who cannot make their monthly payment can avoid defaulting on their loans.
Car Payments | Avoiding Automobile Repossession During Covid -19
Most everyone depends on having a car to get back and forth to work so if you believe you might have difficulty paying your loan, it is important to contact your lender to negotiate a delay in your payment or revise the schedule of payments altogether to avoid having your car repossessed. Many lenders are offering Covid-19 related car relief programs, so it is important to make the call and get any agreement to change your contract in writing.
Bankruptcy Protection in the Aftermath of Covid-19
Many impacted by the pandemic may not be able to bounce back financially in the near future – the economy will take time to recover. Bankruptcy protection is a good strategy for many to discharge unsecured debt such as credit cards, medical bills and certain loans so that they can start off on a stronger financial footing as the economy opens up. Individuals and businesses also have options under Chapter 13 repayment plans or Chapter 11 business bankruptcy allowing them to repay debt while retaining assets in order to position themselves for success for the long term. If you need financial relief or have questions regarding chapter 7, 13 or chapter 11 business bankruptcy, contact the Peoria bankruptcy law offices of Charles E. Covey for help at 309-674-8125.
