How to Manage Your Bills During COVID-19

April, 2020 – The Federal Trade Commission released suggestions on managing your bills during this very difficult time (COVID-19 quarantine).

COVID-19 has disrupted life for everyone on the planet.  Each of us is asked to sacrifice for the health of the entire nation and world.  Unfortunately, that sacrifice comes at a cost for many.  They are unemployed or their income has been reduced, but the bills for their regular living expenses (rent, food, utilities, car payment, and insurance) continue to come, month after month.  Yes, there are a few programs that might assist, but most of the programs only delay the inevitable – THEY MUST BE PAID.  You don’t get a free place to live.  Even if there are mortgages and rental programs, they don’t forgive the debt. Instead, the payments are just postponed to a future date (which may only be 3 months in the future).

Seniors are hit extra hard: not only they are one of the most vulnerable population to COVID-19, but most are on a fixed income, so do not have additional resources if they have unexpected expenses (medical, etc.).

In summary here is what the FTC suggested:

• Know what you owe and will owe for the next year.  Make a list of your monthly bills: rent/mortgage, car payment, utilities, student loans, medical bills, and anything else. Look at your bank statements and credit card bills to find occasional expenses (such as annual insurance payment or insurance paid every quarter) and those expenses that only happen occasionally, but are very expensive (such as medical, home and car repairs).  By putting this in writing you have something to compare your current spending.
• Don’t be afraid to ask for help, 90 percent of us are in the same situation: Pride can kill you!!  If you are not taking care of yourself, then you are more susceptible to the virus. Many companies have special programs to help people right now. Contact the companies you owe money to and try to work out a new payment plan with lower payments or delayed due dates. Make sure to get any changes in writing.
  • Find out if your state or local government offers programs that will allow you to hold off on paying some bills right now.
  • Trouble paying your mortgage? Here’s some advice on how to manage that. If you have a government-backed mortgage, you may be able to delay the payment by contacting your servicer.
  • Need additional help? Check out ftc.gov/creditcounselor for tips on how to choose a counselor who really helps you out.
• Prioritize your expenses: If you still can’t pay everything on time, look at what would happen if you couldn’t pay each bill and decide which to pay first. Is a place to live and food to eat more important than paying credit cards?  I would think so.  Do not worry about your credit report at this stage – it is, what it is.  There is nothing you can do about it today.  Instead, focus on having the basic necessities.
• Educate yourself about your options and the legal obligations of the creditors.  Don’t assume what a creditor says is accurate (they are in the business to get paid and will lie).  Rules govern what a creditor or collection company can do.  Some of these rules are brand new (it takes new law at least five years to be interrupted by the courts).  Know your rights: what is protected from creditors? Can creditors take my stimulus money?  How does bankruptcy work? Check out the FTC’s advice on how to cope with debt in the short term, and how to get out of debt when you are able.
• Watch out for scams: In stressful times, scammers are everyone and focus on our seniors, but you too may be vulnerable. Beware of any company that guarantees that creditors will forgive your debts, or makes you pay up front for help. If you are looking for debt relief, make sure to find help you can trust.

MUSINGS FROM DIANE:

This is a very scary time for everyone, but please remember ‘you are not in this alone’.  But you are the only person who can take care of you (even if you are in a busy household).  Today, even more than in the past, it is important to know your needs (financial and emotional).  Eventually we will return to a new ‘norm’, but it may not be the norm we had last year.  Please don’t ignore the current situation.  Instead, every day take a few minutes to lay out a survival game plan.  Of course, no one know how long this situation will continue, so be flexible in your plan.  Focus on what you need to survive – food, a place to live.  NEVER be bullied by a debt collector to send money that you should use on life necessaries.