The pandemic has wreaked havoc to the US economy. Almost 40 million Americans lost their jobs. With bills and mortgages to pay, this can spell trouble for many. Even before the pandemic, some were already struggling with their payables. Around 110 million Americans entered the pandemic with credit card debts.
Dealing with debt is depressing as it is. Having to deal with debt with unemployment looming in is catastrophic. What will happen to the house? Will the bank seize the car? Who will pay the student loan? How will you pay for your remaining credit card debt and the utility bills?
These are the stressing questions that many Americans are facing right now. If you feel like you are at the end of your wit’s end and the payables are piling up, a collections attorney can help. Here are the steps that you can take to manage your problem.
Take stock of your debts.
It can be painful and depressing to do, but making a list of all the money that you owe can help. You cannot take action if you do not know the problem, to begin with. Make a list from your most pressing debt to the least important ones. Mortgage, rent, child support, and auto loans might be at the top of your list. Prioritize your debts according to their consequences. If you miss your mortgage or your rent, you can end up homeless. Missing child support can suspend your driver’s license, penalize you, and can land you in jail.
Talk to your lenders.
If you think you cannot pay your mortgage or auto loan, contact your lender. Reach out proactively and discuss your financial or employment situation. Most lenders offer programs where you can delay or adjust your payments. Some lenders waive interest charges in light of the current situation. All you need to do is reach out and talk to them.
When you talk to your lender, ask for the following:
1. Available hardship or relief programs for debtors affected by the pandemic
2. Financial consequences of registering to a hardship program such as effects on your credit limit and credit reports
3. Available options for those who still cannot pay at the end of the program
If you had your mortgage from federal or government-sponsored enterprises, federal law would protect you. The CARES act provides you with the right to pause your government-sponsored mortgage for a long time. Your lender might not foreclose on you earlier than August 31, 2020. You can always request forbearance of up to 180 days.
Talk to your credit card issuer.
If you are on the edge of your financial situation and you see no way to pay your bills at the moment, talk to your credit card issuer. Explore your options, such as payment relief, balance transfer, or debt consolidation. Most credit card issuers are offering payment relief programs in response to the pandemic. Just be wary of scammers who are trying to take advantage of the vulnerability of many Americans.
Seek legal help.
If you have assets that you wish to protect, or if a creditor is harassing you, seek the help of a collections attorney. Your collections attorney, aside from being your legal counselor, can also serve as your credit counselor.
How Can A Collections Attorney Help?
A reputable collections attorney can help evaluate your situation and give you legal advice. Each case is unique, and your collections attorney will provide you with options that suit your needs.
Generally, your collections attorney will help with the following:
- Educate you on your right as a consumer
- Help you find lighter and easier ways to pay your debts. One method that can help you deal with overwhelming obligations is debt consolidation.
- Assess and determine if bankruptcy is the solution to your problem.
- Help stop harassment from collection agencies.
Your collections attorney will handle all communications to your lenders and collection agencies, if any. He or she will be authorized to act on behalf of you.
A collections attorney can help you consolidate your debt and reconstruct your payments. Debt consolidation can help you cut back on added interests.
If you simply do not have the money to pay your debts, you can consider filing for bankruptcy. A Chapter 13 bankruptcy will allow you to develop a repayment plan so you can pay your creditors through installments in a period of three to five years. A Chapter 7 bankruptcy, on the other hand, allows you to liquidate your non-exempt properties. Proceeds will then be distributed to your creditors. Bankruptcy, however, does not lift your responsibility for your child or spousal support.
Your financial hardships seem overwhelming, but you can always ask for help. With the right financial advice and solution, you can pay off your debts and have a fresh start.