So, we may start to see more calls from unknown numbers for unpaid debt such as 770-238-1941 or 866-890-3387. Let’s switch gears from inbound sales to the coronavirus relief options available when you are struggling to cope with finances. As the lockdown across the US progresses due to the Coronavirus, maybe you are not sure what this will mean for your finances. You are afraid of losing your job in case the situation doesn’t get better. Or maybe you are thinking about selling the stock in your 401k.
Still, you might be wondering how you’ll pay off your debt or contemplating pulling out of a considerable buy. You should be relieved that you are not in this situation alone, and many other people are facing financial difficulties from the Coronavirus.
The fact of the matter is by now, the number of Coronavirus cases globally has skyrocketed. This article will open your eyes to Coronavirus relief and hardship choices at your disposal.
1. Your Coronavirus Hardship Choices
The good news is that creditors and the government have initiated the provision of hardship relief to people whose finances have been affected by the Coronavirus. Here are some of the ways:
Housing Coronavirus Relief
For many people, your rent and mortgage are some of the most significant expenses that you have to grapple with every month. Firstly, you may want to use a mortgage payoff calculator to estimate your affordability and compare that to your monthly budget. If you are in need of relief, below are some of the Coronavirus hardship options we have assembled for you.
Mortgage Relief Because of Coronavirus
Federal Regulators have issued instructions that lenders, via Freddie Mac and Fannie Mae, should provide homeowners with flexible terms, especially those who’ve been rendered jobless or lost income streams due to the Coronavirus.
Concerning the severity of your situation, you might qualify to have your mortgage payment lowered or suspended for up to a year. Notably, this directive will cover around 50% of all home loans in the US.
Check out the websites below for additional details about available support:
Rental Relief Because of Coronavirus
Also, those of us who rent our homes will receive urgent relief from the US Department of Housing and Urban Development (HUD). Additionally, the HUD has suspended all evictions and foreclosures for the next two months.
Credit Coronavirus Relief
Maybe you have been bombarded with emails from your creditors regarding the Coronavirus response. In case you are facing any Coronavirus-related financial hardship, it would be a great idea to contact (call, text, email, or chat) your bank. In this way, you’ll learn the type of hardship programs they are offering, including not making any payments for a few months or interest rates reduction.
It is in your best interest to contact your bank if you are dealing with Coronavirus financial difficulty. The majority of creditors are providing different packages of hardship support, so it doesn’t hurt to reach out to them in case you are facing any Coronavirus hardship.
Government Coronavirus Relief
As more information comes in regarding the broad array of hardship relief plans being offered, this article should be updated regularly. You can check out how the government has responded concerning the Coronavirus and in what areas you qualify for hardship relief.
On that note, you might want to look at the following two guides from government websites to help tackle the Coronavirus hardship you may be experiencing:
- IRS Coronavirus Tax Relief – This website will also have pertinent need to know information on stimulus checks, so you may consider following up to the website often.
- Consumer Finance Protection Bureau – The CFPB website houses information covers such things as student loan options, potential scams and tips for financial caregivers.
2. Your Coronavirus Hardship Debt Relief Choices
What happens when you are no longer able to go on with your minimum payments due to medical hardships, job loss, or high-interest rates? Fortunately, you have some choices, and we’ll tackle them one after another. It is vital to have an in-depth look at each option as all of them have benefits and drawbacks.
Debt Payoff Planning
First, you should find out if you really need debt relief options in the first place. This is because you might be able to afford to service the debt through debt consolidation. You can get some crucial information about debt consolidation options courtesy of the US government.
Secondly, you might go the ‘debt payoff planning’ way. In this scenario, you should factor in your entire earnings and expenditure and find out if you can handle the debt. When you have fully grasped the details of all your expenses and income, it will be easier to prioritize the debt and do away with it. On the expenses side, you may look to check out apps as Honey or Rakuten that help you potentially get cashback when shopping. Check out this Honey review and a Rakuten review for more information. You could also check out self lender which helps build and increase your credit score.
After that, utilize a spreadsheet or a debt payoff planner app to give plan how the extra monthly payment should be given priority.
Avalanche and Snowball methods are highly popular strategies. If you use the snowball debt payoff formula, you can lose massive amounts of money in case your most substantial debts have the highest interest rates. Therefore, we designed the Savvy Debt Payoff strategy to merge the most impressive aspects of both Avalanche and Snowball techniques to save you money on interest.
Chapter 7 Bankruptcy
It is possible to be eligible for Chapter 7 bankruptcy, but at times, bankruptcy has a bad reputation, and there are misunderstandings about bankruptcy. What you should keep in mind is that bankruptcy is a legit and lawful way of debt relief.
While there are negative sides to bankruptcy, it is usually the least expensive and quickest way to debt relief. To be eligible for Chapter 7 bankruptcy, you have to take a means test. To be clear whether you qualify, you may consider taking a Chapter 7 Means Test Calculator.
Take into consideration all the pros and cons of a Chapter 7 bankruptcy, although it is a commendable way of debt relief for lots of people.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy can be termed as a payment-arrangement based bankruptcy. The majority of folks settle for Chapter 13 bankruptcy as they are not eligible for Chapter 7 bankruptcy. Other reasons include lots of property, or they just don’t fancy debt settlement.
Typically, Chapter 13 can last from 3 to 5 years. About the payment arrangement, there are some common factors between Debt Settlement and Chapter 13 Bankruptcy.
If you opt for Chapter 13 bankruptcy, it will be useful to get an estimate monthly payment and compare that figure with what you are currently parting with for the debt. It is recommended to use a Chapter 13 bankruptcy Calculator to get an estimate Chapter 13 monthly payment.
Debt Settlement
Debt settlement agencies partner with your creditors to work out a reduced figure. Although the full cost of debt management is often higher than debt settlement, debt settlement can negatively affect your credit rating as creditors will find it hard to settle the debt until the accounts have passed their due dates. In most cases, debt settlement severely affects your credit score.
Even if debt settlement is a suitable alternative for folks looking for relief, it is imperative to use a reputable debt relief company because some firms are less than reputable. It is also advisable to weigh the advantages and disadvantages of debt settlement before you make up your mind.
Debt Management
Debt management (also known as credit counseling) agencies partner with your creditors to come up with a decreased interest rate on your debt. You can also refer to these companies as credit counseling, and while most of them are non-profit, some will charge you a fee.
People often confuse debt settlement and debt management. Debt settlement firms attempt to work out a reduced total amount owed, for instance, $10,000 to $5,000.
On the other hand, a debt management firm tries to work out a reduced interest rate, for instance, 22% to 8%. To be more informed, you can read debt management vs. debt settlement.
Conclusion
Most people are undergoing Coronavirus financial hardships. Just remember we are in this together, and we will weather the storms together and come out victorious. Lastly, please add your ideas and thoughts in the comments section below. You can share the article also to help others in the same situation.