How to Take Care of Mounting Bills

The past seven months have been a financial game changer for many people. Some were struggling to make ends meet prior to the pandemic, and other financial lives where knocked off balance as our world changed. With this blog, we share some practical strategies on how to move forward financially and avoid the aftershocks from the changes in our finances.

Keep an Eye on All of Your Bills

One way to do that with credit accounts (mortgage, auto, credit cards and more) is by checking your credit report at Annual Credit Report. This is the official site that everyone can use to access their credit reports – for FREE. Between now and April 2021, everyone can receive a weekly copy of their credit reports, from each bureau.

When you review the report, make sure that all the accounts are reporting as you expect. If you and your creditor made a payment arrangement due to COVID-19, there should be NO missed payment marks for that account (as long as you were current going into the agreement).

Also, review the credit report for any other errors such as a collection account you do not recognize, misspellings of your name or inquiries that you did not authorize.

Mortgage Payments

The new legislative changes in the CARES Act have allowed for another 180 days of forbearance on payments.  Similarly, private mortgage loans also provide special programs that can sort out your bills. Be sure to understand the pros and cons of skipping mortgage payments.

Trouble Paying Bills

Reach out to your creditors or lenders if the financial situation feels dire or like there is no way to make payments, due to COVID-19 factors. In fact, CFPB (Consumer Financial Protection Bureau) and other financial regulators are encouraging lenders and creditors to lend a hand to people in these times.

Be aware that while creditors may not note an account as past due, if someone is in a payment arrangement due to COVID-19, the notation on the credit report can interfere with other credit options. For instance, if someone made payment arrangements with their creditor and that creditor marks their account payment history as NDC (Natural Disaster Code), another lender may decline to extend credit. The second creditor may view the NDC as an indicator that the person’s financial situation is unstable and now is not a good time to extend credit. Although the situation is not due to something a person did wrong, the creditor still must limit their risk. This applies to creditors across all types – Mortgage, auto, credit and other lenders.

So, to be prepared, we have created a checklist to help make financial decisions during  times when money may be tight.

Create a Checklist of Questions

Here are a few questions you should ask:

• If I will not be able to pay my debts due to the coronavirus pandemic, what are the available relief programs?
• Is there a hidden or added cost attached to the current creditor plan?
• What would be a suitable timeframe or relief period to start repaying?
• If my financial state gets worse or the relief period expires, what are the options?

After the Checklist: Take Action

After a thorough evaluation of your checklist, take actionable steps:

• Review the details of available relief programs online.
• Find out more details about relief from your lender. Let the lender know about your financial hardship as that may open the door to more options.
• Read, understand, and ask questions about the terms and conditions of financial assistance plans. Especially, what will be required when the assistance is complete?
• Find out how the aid would come across in your credit report. How will other financial institutions or agencies view that assistance?
• Dispute common errors that can help you save money and improve credit.

You would be surprised how a few tips and up-to-date information can help you restore your financial stability. You can, of course, keep an eye on new state and federal regulations that may impact your cash flow.

It is always a good time to be smart about our money and prepare for unexpected expenses and situations.  We have tools to help you track your expenses, devise a realistic budget, stabilize your finances, and make debt payments regularly. Find out the latest financial information, strategies, and tips right now on our website or call 1-888-282-5811.

Published Sep 22, 2020.