When officials began issuing local and statewide shelter-in-place orders in March to stem the spread of the coronavirus, scores of businesses across the country were forced to shutter, leaving a historic number of Americans unemployed and grappling with overwhelming financial loss.
To help soften the blow, Congress passed the CARES Act, a massive $2.2 trillion stimulus package. Among many other things, the bill includes one-time payments of up to $1,200 per person for millions of Americans with adjusted gross incomes of up to $75,000, plus $500 for each qualifying child. On April 11, the Internal Revenue Service announced it had issued the first set of checks.
But $1,200 only goes so far — especially in the Bay Area — and if you find yourself still unable to pay your bills, there are other forms of financial assistance potentially available. But before contacting creditors and lenders, it's crucial to come up with a solid game plan.
“I think the very first step that you need to take is to sit down and look at all of your financial resources and take into account everything that you have available to survive a reduction or loss of income,” said Bruce McClary, a spokesperson for the National Foundation for Credit Counseling, a nationwide network of nonprofit financial counseling organizations.
McClary suggests that everyone — even those with substantial savings — implement an emergency budget and be aware of relief options. “Things are changing on this front, and there are more programs that are likely to be announced,” he said.
If you’re experiencing financial hardship due to the pandemic, navigating available relief options can be a downright overwhelming process. So, here’s what you need to know about paying the bills that might be on your plate:
- Calling About Payment Options? Read This First
- Banks and Credit Card Lenders
- Utilities
- Phone and WiFi
- Student Loans
- Car Payments and Insurance
- Rent, Mortgage and Property Taxes
Calling About Payment Options? Read This First
Before contacting your creditors or lenders, make sure you’re prepared and know what to say in order to access the full range of payment relief options available, whether it be loan deferments and fee waivers options or payment plans and continued service guarantees.
“It could be a lot of phone calls, but it's very important that you start the process and that you're the one who initiates these conversations,” McClary said.
According to the Consumer Protection Finance Bureau, you should have the following information in hand before contacting lenders:
- Your financial and employment status
- How much you can afford to pay
- When you’re likely to be able to restart regular payments
- Detailed information about your income, expenses and assets
“It's always best to enter into the conversation with a broader question about what programs are available for people who are experiencing financial hardships that are related to COVID- 19," McClary said.
Beginning the call with an open-ended question allows the lender or creditor the opportunity to tell you what kind of relief options are available. Explain your situation and be sure to explicitly say you’re experiencing financial hardship due to the coronavirus. Some lenders may have certain processes already in place for borrowers who are impacted by the crisis, but not necessarily for those experiencing unrelated financial hardship.
If possible, make sure you request in writing any assistance options that are offered by your financial institution, and at the very least, take good notes.
It could also be beneficial to consult a financial or housing counselor before reaching out to creditors to make sure you're prepared. You can access free or low-cost financial counseling through the NFCC or the Financial Counseling Association of America.
If you've lost a significant chunk of your income, one commonly offered form of relief is known as a forbearance program. It allows you to skip one or more bill or loan payments, usually without penalties like late fees or having services turned off.
If forbearance isn’t an option, other programs may also be available, like reduced payment plans.
“If someone says 'We don't have forbearance programs,' don't hang up the phone and think that you're out of options,” said McClary. “Ask leading questions to identify what other options are available.”
And if you don't think you're getting the assistance you're entitled to, some experts suggest filing a complaint to federal and state consumer protection agencies (which you can do here and here).
"Sometimes that can make a difference," said Kevin Stein, deputy director of the California Reinvestment Coalition. "And there are people in the agency who are supposed to be looking for trends and bad actors, so maybe it's information they would act upon.”
Below is a list of specific relief programs available if you're struggling to pay your bills. But remember, creditors and lenders may be able to provide relief on a case-by-case basis, even if certain options aren't listed on their websites.
