She had a plan to pay off $23K in debt and then pandemic hit – Detroit Free Press
- July 30, 2020
- By: Greenpath Financial Wellness
Excerpt from the Detroit Free Press highlights how one family is managing finances in a challenging time, and also features GreenPath CEO Kristen Holt.
The Detroit Free Press highlights the personal story of Michele Halis. She had a plan to pay off $23,000 in credit card debt and personal loans before COVID-19 turned the economy upside down.
She owed a bit more on her credit cards than half of what she was making each year at her regular job. It was debt that had built up over time. Life circumstances like a divorce, lack of child support when her ex-husband lost his job, and expenses like braces certainly add up when you’re raising two children.
This story is relatable to all of us, especially now. How soon anyone’s financial health will get back on track, though, remains debatable.
While there’s some hope for another round of stimulus checks, economists are sounding the alarm about the possibility of a rocky recovery for the U.S. economy.
The story shares all the details of Michele’s situation. Will it be tough to find a second job?
Can she find new ways to make more money and keep paying down that debt, perhaps finding a better paying job?
Michele is thankful that she took steps about 18 months ago by contacting nonprofit GreenPath Financial Wellness when she became overwhelmed with credit cards, which had annual percentage rates of nearly 30%.
She wants others to know that they shouldn’t be ashamed if they’re stressed over money.
Thanks to lower rates, a payment plan and extra income, Halis has been able to pay down around $8,000 in credit card debt. Some rates had been lowered to 0% to 12%. The nonprofit was able to get interest rates reduced on many of her credit cards.
“I think my lowest interest rate I had was 26%,” she said. “My balances would never have come down.”
“You’d be surprised how many people have more debt than they can handle.”
A Challenging Time
All of our financial headaches didn’t start when the coronavirus helped to drive the U.S. economy into a recession in 2020.
But the uncertainty created by the virus — and the economic shutdowns associated with the pandemic — could make it tougher for many to work their way through financial challenges. Many people weren’t in a healthy spot even before the recession hit.
Thanks to high housing costs in many markets and other factors, many people had been working two or three jobs in the pre-COVID era to keep up. Going forward, economists expect it could be harder to pick up extra income by taking a job here and there and working evenings or weekends.
More stimulus checks could be in the works as Democrats and Republicans in Washington negotiate a second coronavirus-relief package. And extra money would help many people as we move into the fall.
But some other relief that allowed consumers to delay some payments, such as those on many federal student loans, are scheduled to end soon.
The odd thing is that many people aren’t crafting a Plan B or Plan C here. Maybe, they still imagine that everything will be back to normal in a month or two. Maybe, they’re using all the energy they’ve got to just cope through the next week.
Help in Uncertain Times
“When things are uncertain, it’s very hard for people to take action,” said Kristen Holt, CEO of GreenPath Financial Wellness.
Holt said she’s surprised, but not really, that GreenPath hasn’t been seeing an uptick in calls given that the U.S. unemployment rate shot up from a 50-year low of 3.5% in February to 14.7% in April but then pulled back to 11.1% by June.
The unemployment rate in metro Detroit was 17.7% in June, down from 23.2% in May and 21.5% in April, according to data released in mid-July by the Bureau of Labor Statistics.
Holt knows that people can drag their feet when they’re facing a serious problem. Some COVID-19 relief, such as temporary efforts to allow people to postpone making car payments, also helped fill a necessary void.
But she’s concerned that many people aren’t factoring in how they’ll handle the bills as rent, as Michigan’s eviction moratorium has ended.
Consumers won’t be able to delay making their payments forever.
For many, the best bet now is to take steps well in advance of when bigger bills come due.
Hear the Full Story
Listen to GreenPath’s podcast episode “Feeling Optimistic in a Time of Challenge” to hear the full story in Michele’s own words.
We Are Here To Support You
Our financial counselors are available to talk. They can help you figure out a plan to manage through crisis and will walk through your whole financial picture to help you identify options that can relieve stress and make it easier to bounce back.