Coronavirus (COVID-19) is severely transforming how we run our lives and our workplaces. Many people face a reduction in income or job loss altogether and will find it challenging to keep up with their student loans, mortgage payments, credit card bills, and other debts.
In this article, you’ll get information about various options that might be available to you if you're worried about falling behind in bill payments.
The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act suspends payments (and interest won't accrue) on federal student loans held by the U.S. Department of Education for six months, until September 30, 2020. The payment suspension is automatic, you don't have to request it.
The Act also stops collection actions, wage garnishments, and Treasury offsets, and prohibits negative credit reporting during the coronavirus national emergency. (To learn about different options if you’re having trouble paying your federal student loans due to COVID-19, read How to Manage Your Federal Student Loans During the Coronavirus Outbreak.)
As soon as you realize you’ll have trouble making your next mortgage payment, call your loan servicer to learn what options might be available to you. You could be eligible for a forbearance, like under the CARES Act, or another form of short-term immediate mortgage relief, like a waiver of late fees. (If you’ve recently fallen behind on mortgage payments, or think you soon will, due to coronavirus, read How to Get Mortgage Payment Relief During the Coronavirus Outbreak.)
The CARES Act also imposes a 60-day foreclosure moratorium for federally backed mortgage loans starting March 18, 2020, including loans purchased or securitized by Fannie Mae or Freddie Mac, FHA-insured loans, loans insured or guaranteed by the VA, and loans made, guaranteed, or insured by the Department of Agriculture. This moratorium covers the majority of residential mortgage loans in the country.
On March 18, 2020, the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, announced a suspension of foreclosures and evictions for a minimum of 60 days. On May 14, 2020, FHFA said it was extending the moratorium until at least June 30, 2020, and later extended it again until at least August 31, 2020. The foreclosure moratorium applies to Fannie- and Freddie-backed, single-family mortgages. The Federal Housing Administration (FHA) also set a foreclosure and eviction moratorium through August 31, 2020, for homeowners with FHA-insured single-family mortgages. The Department of Veterans Affairs (VA) also imposed a foreclosure moratorium on VA-guaranteed loans, which lasts through August 31, 2020.
Many states have imposed a temporary foreclosure moratorium as well. Numerous counties are suspending sheriff’s sales and evictions indefinitely due to the COVID-19 outbreak. Courts, too, across the U.S., are shutting down to halt the spread of the virus and are postponing foreclosure hearings as part of the process.
If you're behind in paying your property taxes, certain counties are declaring a moratorium on property tax foreclosures and tax sales. Call your county treasurer’s office or look online to see if your area has a moratorium.
Many credit card issuers, including Capital One, Chase, Citi, U.S. Bank, Wells Fargo, and others, have released statements on their websites announcing several kinds of assistance for consumers during the COVID-19 outbreak. Available help includes credit line increases, collection forbearance, and skipped payments.
Banks, credit unions, and other financial institutions are offering loan extensions and deferred payment options, among other things, if you'll have trouble making payments on a personal loan or small business loan. (For more information about potential relief if you can’t make payments on a personal loan, small business loan, or credit card debt, read Dealing With Loans and Credit Card Debt You Can't Pay After COVID-19.)
If you need money to make ends meet, different lenders and the U.S. Small Business Administration (SBA) are offering loans to those affected by coronavirus.
Many government bodies, like in California, Connecticut, District of Columbia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Vermont, Virginia, West Virginia (where regulators have urged a suspension of disconnections), and Wisconsin have ordered a moratorium on utility shutoffs. Some utility companies have also implemented a shutoff moratorium. To find a regularly-updated list of states and companies that have implemented disconnection suspensions, go to the Energy and Policy Institute website and also the Federal Communications Commission website.
Many phone and Internet providers, too, are waiving late fees and postponing shutoffs. Some providers are giving free Internet service to new customers or unlimited data to current customers for a limited amount of time, like 60 days.
Lenders are offering payment delays and other alternatives to those who will have trouble making their car payments.
When you're sure that your income will be reduced or eliminated as a result of COVID-19, contact each of your creditors to let them know about your situation. Tell them how coronavirus has impacted your ability to pay your account and inquire about options for financial relief. If you're not happy with the alternatives, feel free to ask if any other options are available for you to consider. The more you know about your choices, the more likely you'll be able to come to an agreement that works for your circumstances.