In the midst of the COVID-19 pandemic, millions of people have lost jobs or had their salaries greatly reduced. As a result, many of these individuals are not able to pay their bills. This can be a scary and frustrating time if you fall into this category. Fortunately, you do have some options to help you through this difficult time. The following are some tips to help you manage your finances during the pandemic:
File for Unemployment
If you have not already done so, consider filing for unemployment if you have lost your job or are furloughed. There are special considerations in many states that allow you to file for unemployment based on the current situation. Even if you are not sure if you qualify, go ahead and apply. State rules vary based on your circumstances. Keep in mind that the filing process can be time-consuming due to the sheer amount of people impacted by job losses during the pandemic. If you are denied initially, you have the option to appeal your claim as well.
Contact Your Creditors
Another option is to contact your creditors and explain the situation. There are many creditors who are offering different forms of assistance during this unprecedented time of job loss. Some companies are allowing their clients to defer payments for a certain amount of time. Others are willing to place your missed payments at the end of your loan. You may also receive a lower interest rate temporarily to help reduce the amount of your payments.
Modify Your Loans
Certain loans can also be modified, particularly mortgages. You should not skip your loan payments completely unless you have written permission from your lender to do so. For those lenders who are not willing to allow skipped payments, they may offer a modification program that will change the terms to help you. What you do not want to do is assume you will automatically be allowed a loan modification. Always contact your lender to see what your options are.
File for Chapter 7 Bankruptcy
If you have lost your job and are not having success replacing your income and you are financially drowning, you may want to consider filing for Chapter 7 bankruptcy. This program will restructure your debt and likely discharge much of it, leaving you with little to no debt. However, this option does have its own set of financial consequences that you must strongly consider before going this route. Contact an attorney for more information about Chapter 7 bankruptcy.