LEXINGTON, Ky. (LEX 18) — The coronavirus has caused immense financial hardship for millions of people. Unfortunately, just because your paycheck shrinks or disappears does not mean your bills do. So, how can you chip away at your debts while being stretched thin?
Like so many people, when the coronavirus hit, Deanna Cofield Rawlings lost her job.
"I was furloughed. As soon as non-essential businesses were asked to stop, I was out of a job," Cofield Rawlings said.
Immediately, she filed for unemployment, received the check, and everyone was great...until it wasn't.
"So that happened, and all was well, and then I never got a check again," Cofield Rawlings explained.
Nearly two months later, that check is still the only one she has received. To stay afloat, she cut out all non-essential expenses and has relied heavily on an emergency fund, but she said that is now gone.
"I am lucky. I am one of the lucky ones. I did have some savings, but it was starting to run out, and I was really starting to panic, " Cofield Rawlings said.
She said she is lucky because she knows so many others are not in the same boat, and whether it is rent, credit card bills, student loans or car payments, the bills simply don't stop.
The experts at Credit Card Insider recommend if you find yourself in this position, start by taking a look at what you absolutely need to pay now.
"Make a list of your priorities financially, so if you've got ten bills that need to be paid, what are the most important? Is it rent or your mortgage? Is it an expense for your children," asked Greg Mahnken, a credit industry analyst with Credit Card Insider.
Mahnken said from there, at least try to pay the minimum amounts. This ensures you stay in good standing, and no damage is done to your FICO score.
"It's important to lay out all your bills, all your debt, all your payments, and say what are the minimums? And then how much do I owe total on these, and also your interest rate on them. From there, you can make a plan to pay down those debts," Mahnken said.
Finally, Mahnken said it is essential to communicate. He said most banks and loan companies are working with people right now because they know money is tight, so do not be afraid to ask for help.
"If you know you're going be late on a payment or you're going to be struggling to make at least the minimum, right now is the best time to contact your issuer, contact your bank and say, 'hey I'm really struggling, what can you do to work with me?' And thanks to the CARES Act, right now, if you enter into an agreement for debt relief or temporary waiver of late payments and you hold up your end of the bargain, they can't put your account into a negative status," Mahnken explained.
As for Deanna Cofield Rawlings, just this week, she heard back from unemployment, and she is set to receive her payments any day. She said she knows they are working hard, but for those who need the money, it can be a scary time.
"I think be the squeaky wheel if you're really in trouble. If you have time to wait, they will get to you," Cofield Rawlings said.
If you are forced to defer loan or mortgage payments during the pandemic, the federal government has told lenders not to report these consumers as delinquent or past due. Still, checking your credit report and score is a good idea. The three credit-reporting companies are providing one free weekly credit report until April 2021. You can get those reports only at AnnualCreditReport.com.
Learn how to read your credit report here.
For information on what credit card issuers are doing for the customers doing the pandemic, you can visit this website.