Managing Debt in the Time of COVID

  • July 8, 2020
  • By: Greenpath Financial Wellness

In the early weeks of the pandemic, understanding the economic impact of the crisis was on the minds of most of us A specific concern was managing debt in the time of COVID. 

The roll-out of forbearance programs as part of the CARES Act gave relief to millions of households and gave Congress time to bolster unemployment benefits and offer emergency aid to businesses.  

For those managing debt in the time of COVID, it was helpful to work with creditors to temporarily pause payments toward credit cards, mortgages, auto loans, federal and private student loans and other monthly payments. 

These options provided relief and stability to many people during an uncertain time. 

Fast forward several months, and many of these forbearance programs are nearing their expiration dates. Lenders are now set to decide whether to continue letting people delay paying off debt including credit cards balances, personal loans and car payments. 

LEARN MORE ABOUT DEBT MANAGEMENT PLANS

If you are having trouble paying off your credit card debt and/or other debt, a debt management plan may be a good option.

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As the pandemic crisis continues, having a clear set of options can help us feel a sense of confidence when looking at family finances.  Here are some ideas to move forward as deferrals and forbearance periods are set to expire: 

1. Review the Programs  

There’s a lot to know about the ins and outs of deferrals, and student loan deferment and forbearance. 

For people who participated in credit card deferrals, contacting your lenders to obtain a review of the terms of the deferrals is helpful.  The information is a good reminder as to the terms of the repayment options and deferral time period. 

For those who delayed monthly mortgage payments as part of the CARES act, it can be helpful to review the terms of the original programs. The Conference of State Bank Supervisors provides an indepth guide entitled the Consumer Relief Guide – Your Rights to Mortgage Payment Forbearance and Foreclosure Protection Under the Federal CARES Act.      

The idea is to connect with information so you can make strong decisions about your future. 

 2. Stay Current  

To help manage the uncertainty, it is also helpful to stay current with information related to any changes in forbearance and deferral expiration dates. 

At this writing, the temporary delay in paying off personal debt is set to expire around the end of July for some creditors. A few big lenders are extending deferments by several months. There could be  changes to the timing, so staying current with the latest news and information is a good option for people who will need to start making payments again 

When managing debt in the time of COVID-19,  Consumer Financial Protection Bureau is a good source of trusted information and publishes recent updates.  

 3. Team with Caring Counselors 

As the temporary pause in payments sets to expire, it is a good opportunity to understand options, and take a closer look at not only any loans on pause but also your entire financial picture.

GreenPath’s NFCC-certified counselors help you begin a conversation about where you are today, and what you need to keep in mind when managing expiration of deferrals and forbearance.  For many, it’s a smart way to pay off your debt.  

Caring, compassionate counselors guide you through a process to assess your financial situation, understand your goals, and create an action plan to work toward them. 

You might have questions as to what’s ahead.  We listen with respect, offer advice and information, and suggest options that could help you meet your needs.