Suffice it to say the COVID-19 pandemic took the world by storm in more ways than one. Besides affecting the health of many Americans, the pandemic also altered the economy at large — which in turn changed the employment status and income levels of many people.
According to a report from the Congressional Research Service, more than three out of 10 American households reported lost income at various points throughout the spring and summer of 2020.
If you’re having difficulty dealing with debt, either due to or during the coronavirus pandemic, it’s well worth considering all your options for financial help.
Here are some avenues to explore.
Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act in late March 2020, to provide economic assistance in the form of stimulus checks, unemployment assistance and federal loan forbearance. Certain CARES Act provisions have been extended, so it’s important to check if you’re eligible for any governmental concessions.
Benefits.gov has links and useful information related to:
- Unemployment assistance
- Healthcare and insurance
- Food and nutrition
- Personal and business loans
- Avoiding COVID-19 scams
Leave no stone unturned when it comes to understanding government assistance and protections meant to help Americans weather the storm that is coronavirus.
Concessions from Lenders
In addition to federal assistance, many private lenders have enacted concessions for borrowers to help them avoid defaulting on their debts.
As the credit reporting bureau Experian notes, many institutions have rolled out COVID-19 debt assistance for customers, such as:
- The potential to reduce monthly payments
- Suspension or elimination of late fees
- Lowered interest rates for a period of time
Many financial institutions are offering accommodations for customers who communicate their financial hardships and ask for assistance. Rather than assuming financial protections will be applied to your account, or waiting until after you’ve fallen behind on payments, reach out to creditors, take the initiative and communicate your financial realities to your lenders as soon as possible. Ask exactly which concessions they are offering and how you can qualify. Be prepared to offer paperwork to back up your hardship claims like pay stubs, medical bills and etc.
Explore Debt Relief Options
Whether you were dealing with debt before the coronavirus or you’ve recently taken on debt in the wake of the pandemic — especially on credit cards — there are debt relief options that may make it easier to repay what you owe.
Here are five approaches to credit card consolidation from Bills.com:
- Get a personal loan: Replace multiple outstanding high-interest debts with one low-interest installment debt.
- Open a balance transfer credit card: Take advantage of a no-interest introductory period to attack your debts.
- Get a home equity mortgage: Borrow against home equity at a lower interest rate than you’re currently paying.
- Try credit counseling/debt management: Make an appointment with a qualified credit counselor to go over your budget and options, then sign up for a debt management program if it’s warranted.
- Pursue debt settlement: Try to negotiate with creditors for a lower settlement than what you currently owe.
Every debt relief option has limitations, advantages and disadvantages. Do your homework up front to make sure you’re pursuing a helpful solution, rather than one that will leave you deeper in debt. COVID-19 debt is very common in America now. However, there are ways to get financial help from the government, lenders and debt relief companies during these unprecedented times.