Millions of Americans are still struggling to meet their monthly bills, as the COVID-19 pandemic continues to wreak havoc on the economy. While the CARES Act, signed in March, provided some relief, many of its provisions have expired.
Although it’s unclear whether some of the law’s supports, such as eviction protection, forbidding utility shutoffs and unemployment benefits will be extended, some financial experts are suggesting the unemployed and underemployed consider temporarily skipping or pausing some regular bills during the public health crisis, where possible.
Before taking any action, it’s advised that you assess just where you are, financially speaking. Review your credit card debt and bank accounts and see if there’s any relief available through state or federal programs. Make sure you investigate all your options.
Your state may have its own bill relief options. For instance, in Pennsylvania, a statewide moratorium on evictions and foreclosures has been extended.
It’s advisable, if possible, that you prioritize your rent or mortgage payment so as to avoid eviction, should that exemption not be available to you.
As of August 2020, approximately 3.8 million American homeowners were in forbearance, according to the Mortgage Bankers Association. If you’re among that number, check with your mortgage lender as to your options. Your eligibility for various relief programs is based upon a number of factors, including whether a federal government program, such as Fannie Mae or Freddie Mac, owns your loan.
Student loans pose yet another challenge. If you have a federally-backed loan, your loan and interest payment has been suspended through the end of the year, until December 31, 2020.
Under the CARES Act, paused student loan payments continue to count toward loan forgiveness programs, so if you are in one of those programs, such as Public Service Loan Forgiveness, it’s actually suggested that you not pay your loan bill, as your forgiveness program will continue to be credited, according to the federal government.
Among the payments you may be able to pause for a bit are:
- Mortgage or rent – check with your state and bank for possible relief plans.
- Student loans – check in with the loan holder, as help may be available.
- Credit cards- if you cannot make these payments, contact the card issuer to discuss a payment plan. Don’t just ignore the bill.
- Car payments – check with your lender to see what help is available
- Utility bills – contact the utility and see how they can work with you.
Of course, if you can pay your bills, that’s always the right way to go. However, in these unprecedented times, millions of Americans simply can’t. While few relief programs are fully guaranteed, it’s a smart idea to explore all your options.
If you need assistance with budgeting for your necessary expenses, please reach out to one of our tax advisors. We are always happy to help.