“I don’t have the money in the bank to pay the bills that are coming up,” she said.
Rent will be due, the car insurance payment, the phone bill. “I have credit card debt because I’m a single mom and that’s what I have to do to survive,” she said. “But I’ve never been late on any of my payments. That’s going to change.”
What can you do if you know you are not going to be able to pay all your bills?
Talk to your lenders now
Getting relief is possible, but you need to talk with bill collectors now.
“Companies are going to be more receptive than ever before because they are under extreme regulatory pressure to work with you,” said Ed Mierzwinski, senior director of federal consumer programs at the US Public Interest Research Groups.
“First try to work with your company,” he said. “Let them know you are having trouble making payments.”
To get the federal student loan break, contact your servicer and ask about options.
“People should be aware there are a lot of different ways you can pay your student loan,” said Mierzwinski. “You may qualify for a better situation than the way you pay your loan now.”
Arrange for a break on housing payments
Strong measures are being taken to allow people to follow “stay at home” orders, even when they can’t make the payments.
As part of the package, they also put a stay on reporting late payments to credit bureaus by borrowers who are experiencing hardships.
“We are doing all we can to help those adversely impacted by the coronavirus, including by immediately suspending foreclosure sales and evictions during this challenging time,” said Donna Corley, executive vice president and head of Freddie Mac’s single-family business.
While Freddie and Fannie guarantee about half of US home loans, regulators hope the whole industry will adopt a similar policy.
This relief is available immediately for borrowers who are unable to make their mortgage payments due to the coronavirus pandemic, regardless of whether they have contracted the virus.
But you can’t just stop paying. You need to contact your servicer — the company you make mortgage payments to — and work out a realistic plan going forward.
Use the check from the government
Dealing with a sudden loss of income when the government tells you to stay home is uncharted territory.
“The Covid-19 crisis is unlike any we’ve had in the modern interconnected economy because there are no categories for the impact,” said Mierzwinski. “Millions of people will be losing income or losing their jobs.”
What people will do with the payment is up to them.
“You’re sending it to people who don’t need it and you’re sending it to people who may decide to go surfing instead of working,” he said. “But you can’t make those distinctions if you want to get the money to the people who need it.”
People like Hubbard face hard choices in prioritizing needs.
Still, “there are some bills that will not be paid,” she said.