As the Covid-19 virus continues its spread until we reach that apex of the curve, many consumers are certainly starting to wonder, worry and even panic about how this will financially set them back. Indeed, it is a very uncertain time right now, and more uncertainty lies ahead. For many consumers who may be facing layoffs or furloughs, there are some things to consider that can help you wade through this wilderness ahead.
Congress laid out its CARES Act that was designed to be its relief package for the economic issues many people and businesses are facing. Unfortunately, Congress did not do as much for the consumer as it did for the businesses. Omitted from any new legislation was any provision to defer or forbear payments or any credit relief. Thus, unless consumers can work out their own deal with their lenders, there is no legal help coming. If you do not pay your mortgage or car payment or rent, or any other bills on time, your creditor’s rights are unaffected. You will be considered delinquent and can have negative marks placed on your credit file. There is no moratorium on debt collections or lawsuits. In fact, its so poor for consumers that the Act actually gives creditors and credit bureaus extensions of time to handle consumer disputes. That was the only credit reporting relief thus far – the reporters got all of the protection. Consumers were left to fend for themselves (so read up on which of your elected officials supported which provisions because we have elections coming up!).
But this does not mean all is lost. It is expected that many lenders will step up and make their own offers of deference or forbearance. After all, they are better off keeping their relationship with you and allowing you time to get back on your feet and pay them in full. Contact your lenders and discuss your situation and options. Be sure to get any programs, offers or relief packages in writing. Never skip a payment to a creditor based upon an oral statement that its ok. In addition, mortgage rates are very low now. While we are not sure if or when they will shoot up high again, one should take advantage now. If lowering your monthly payment will keep you in your house longer, start the application process now while rates are low and banks are trying to lend.
Now that some of us are home and maybe have a little extra time on our hands, now is a good time to check your credit report to make sure everything is accurate and in its best shape. Again, some of us may have to turn to our credit in the near future. Some of us may have to draw on the equity of our home. The best credit gets the best rates. Take the time now to pull your report, and note any inaccuracies. Dispute the errors. Find those documents you have been looking for at the bottom of that desk in your house and organize it. Does any of it help your credit disputes?
Finally, with bills left unpaid expect the collectors to come calling. And since some of them may be in the same boat (not able to pay their bills either) expect them to be aggressive. Don’t panic. Just be honest. Let them know that you have been unable to earn during the pandemic, and when you get back on your feet, you’ll reach out to them. Tell them they are welcome to check on you in 2 months or so. Remember, it is not legal for a debt collector to harass or abuse someone. So this sort of response – letting them know your honest situation and requesting a time to be contacted again – should be heeded by the collector. To continue to pester you daily or weekly when you made your circumstances clear can be considered harassment.
Whether it be an issue with your credit report, or an overly abusive debt collector, or maybe a false background report comes out when you are trying to get back to work, SmithMarco, P.C. is open for business, we’re here to help, so contact us for a free case review.
All our best!
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