The coronavirus (COVID-19) crisis has hit South Floridians hard. With stay at home orders issued, many are finding themselves out of work and stuck at home. Many have lost their jobs due to temporary or even permanent layoffs. Without a reliable source of income, these individuals may find themselves struggling to pay their bills. The following tips can help consumers manage their debt during this difficult time.
Federal Student Loan Payments
Under the federal Coronavirus Aid, Relief and Economic Security Act or CARES Act, which was signed into law by President Trump on March 27, 2020, federal student loan payments held by the U.S. Department of Education will be suspended for a period of six months with no interest accruing until September 30, 2020. This payment suspension occurs automatically and does not need to be requested by the individual.
During this time, the CARES Act also stops collections actions for student loan debt, as well as wage garnishment and prohibits creditors from reporting negatively on the borrower’s credit report during this crisis.
Help for Mortgages and Suspension of Foreclosures
Consumers can also receive relief, allowing them to stay in their homes during this time. However, as soon as the homeowner realizes he or she will not be able to make the next mortgage payment, it is important that he or she contact the loan service provider to see what options are available. The CARES Act does allow for forbearances as well as a waiver of late fees for late mortgage payments.
If the homeowner is already at the point where he or she has missed mortgage payments and is at the point of foreclosure, help may be available for temporary foreclosure suspensions allowing people to stay in their homes during this time. The State of Florida has pushed the pause button on foreclosures for at least 45 days so long as the homeowner is able to meet certain requirements. Contact your lender as soon as possible to see if you qualify for this assistance.
Many lenders are helping borrowers who are not able to keep up on their car payments. This assistance can involve payment delays, as well as other options, to allow the person to keep his or her car and keep up with payments.
Credit Cards, Small Business and Personal Loans
If a consumer is struggling with paying his or her credit card bills, many of the major credit card companies have offered assistance for consumers struggling due to the COVID-19 crisis. This help can include credit line increases, forbearance on any collection proceedings, reduced monthly payments and even skipped payments.
Additionally, banks and credit unions are offering loan extensions, as well as deferred payment options for their customers who are struggling to make payments on their current loan. These opportunities are available for both individuals and small businesses. Financial institutions, as well as the Small Business Administration (SBA) are offering small business loans and grants to help small business owners meet their required expenses during this time.
Many creditors also are willing to work with their customers on payment plans in the event they are unable to pay due to extenuating circumstances. Under the CARES Act, if the customer makes an agreement with his or her creditor to defer a payment or agrees to make a partial payment, as well as forbear delinquent amounts, modify a loan or contract or receive any assistance or relief due to the COVID-19 crisis, the creditor is prohibited from reporting the account as delinquent to the credit reporting agencies if the person was not previously delinquent prior to the coronavirus outbreak. However, a payment agreement must first be reached with the creditor to keep them from reporting the account to a credit agency. It is never wise to stop paying on a debt without reaching out first to the creditor to reach an agreement. Make sure you get a copy of the adjusted payment plan in writing from the creditor.
At Kingcade Garcia McMaken, we are doing our part to contain the spread of the coronavirus. Many of our attorneys and staff are working remotely, continuing to move cases along and manage intake. While the coronavirus has impacted every part of our lives, it does not impact our commitment to you.
Since 1996, we have been helping people have a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. This has been a particularly difficult time for South Florida families and many small businesses. We anticipate the coming weeks and months will present challenges for all of us.
As a firm, we will continue to adapt to these changes. In the event of a city, county, or state Stay-In-Place Order, please know that our firm is available to you at (305) 285-9100, via live chat on www.miamibankruptcy.com, Skype at MiamiBankruptcyKing, and email.
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