Coronavirus Relief Measures are Ending: Here’s What You Need to Know
Since the coronavirus pandemic first began causing businesses to shut down in March, consumers have had access to financial relief to help them weather the economic storm. Federal and state governments, as well as individual creditors and lenders, have enacted assistance measures.
However, as businesses begin to reopen, many of these coronavirus relief measures are ending. For your financial stability, knowing when they will end and how to prepare will be incredibly beneficial.
One of the most significant coronavirus relief measures ending is the Pandemic Unemployment Assistance (PUA). Those collecting unemployment have been receiving an additional $600 per week through this program. However, the program is scheduled to end on July 31, with the last payments being made on July 25 or 26. For the millions of Americans who have been relying on unemployment due to coronavirus-related layoffs, this could be devastating. It will be particularly detrimental to those whose job loss will become permanent.
To prepare for the end of PUA, consider adjusting your budget. Look for discretionary spending that you can cut back on, such as cable or streaming services, or unlimited-data cell phone plans. Additionally, consider ways that you can bring in additional income. Selling unwanted items from around the house or finding a safe side hustle, such as dog walking, can be helpful ways to increase your cash flow until you land a full-time position. For those furloughed temporarily, consider asking your boss when you might anticipate returning to work. Discuss options for part-time work or flex hours if the full-time position is not available yet.
Not having a job often leads to not being able to pay your rent or mortgage. As a result, many state and local governments implemented eviction moratoriums, and the CARES Act included relief for federally backed mortgages. The eviction moratorium on federally subsidized properties is scheduled to expire on July 25. More locally, New York has enacted an eviction moratorium for those directly impacted by COVID-19 until August 20. However, New York’s blanket eviction moratorium, offered as a general coronavirus relief measure, has already ended.
If you’re worried about being able to pay your rent, speak with your landlord. Have an open and honest conversation about your situation and why you are having difficulty paying. Your landlord is not obligated to make any concessions but may consider it if you’ve built a good relationship and have always been a reliable tenant. And you’ll never know unless you ask for help what is available.
For those with federally backed mortgages, the length of your forbearance granted by the CARES Act depends on when you began the forbearance. The Act allows for an initial 180-day forbearance period with an optional 180-day extension. Understanding how your lender will adjust your loan based on the forbearance is important. Some may add time onto your loan or add a portion of the missed payments to your monthly payment over a period of time. Others may be expecting a balloon payment – or a lump sum of all of your missed payments – either at the time your forbearance ends or at the end of your loan. Speak with your lender to determine their strategy so that you may prepare yourself financially for that adjustment.
Be sure to keep notes and ask questions if you don’t fully understand the program. You will want to know when it ends; how to prepare for the end; what happens to missed, late or partial payments; what options there are if you still can’t pay; and how is this reported on your credit reports.
Credit Cards and Other Bills
Many creditors, lenders, and other companies, such as utility and car insurance companies, have also been offering their own assistance to their customers. However, creditors determine what assistance to offer on a case-by-case basis. Consumers have had to contact the creditor or company directly to discuss their situation and come to an agreement. Therefore, the ending for these coronavirus relief measures will be based specifically on the agreement you made with your creditor.
If you’re nearing the end of your assistance period and are still struggling financially, consider contacting your creditor again. Explain that your situation has still not improved and why. Once again, your creditor is not under any obligation to help you. However, it is often in their best interest to do so. It will help improve customer loyalty and it may allow the creditor to avoid dealing with bankruptcy proceedings, which are often very costly to the creditor.
The programs offered by creditors may not be enough to prevent you from falling behind or facing collections. If this is the case, you may need to seek other forms of debt relief. Debt settlement is a process that allows you or a professional to negotiate your debts for less than you owe. Consolidation takes all of your debt and puts it into one place, allowing for one monthly payment and generally for a lower interest rate. Credit counseling is an option where you work with a credit counselor on a debt management plan. These are all options that can help you manage your debt and avoid bankruptcy if your coronavirus relief agreement with your creditor is ending.
One of the most substantial measures included in the CARES Act was the interest-free deferment of federal student loans. However, this coronavirus relief program is scheduled to end on September 30. This has been a great relief to the 43 million Americans with federal student loan debt.
In addition to this federal relief, private student loan borrowers may have also received assistance from their lenders. However, no set program existed for private student loans. Therefore, lenders determined relief for borrowers on a case-by-case basis.
Whether you have federal or private student loans – or both – you may be facing the end of your coronavirus relief in the near future. First, be sure you know when your relief is ending. Understand what the end of the assistance will mean for your monthly payment. At the federal level, it should resume as it was, unless you had been making payments during the deferment period. With private student loans, speak with your lender about how your assistance agreement will affect your payments going forward.
For those worried about making payments when your relief ends, speak with your servicer. Consider adjusting your federal repayment plan to an income-driven option. This may lower your monthly payments. Consolidating your federal loans into a Direct Consolidation Loan is also a free service. For private loans, contact your lender. As with creditors, explain your situation and see whether the lender is willing to extend more assistance. You may also be able to work with a debt professional to negotiate or consolidate your private student loans.
The Bottom Line
We all knew these coronavirus relief measures would have to come to an end eventually. However, with the economy still not fully reopen and cases still surging across the country, it may be an abrupt and destructive end for many Americans still struggling. The best way to equip yourself is to know what’s coming. From there, consider adjusting your budget if possible. And contact creditors, landlords, lenders – anyone you pay bills to – to discuss your circumstances.
For those struggling to make ends meet during these trying times, Tayne Law Group, P.C. is here to help. Call our office today at (866) 890-7337 or email us at firstname.lastname@example.org for a free, no-obligation consultation.