Stop Paying Down Debt, Start Saving in Coronavirus Pandemic
COVID-19 has brought about a lot of fear and uncertainty to not only Americans, but the entire world. With more than 600,000 cases worldwide, schools and businesses are shutting down to prevent the spread of this fatal virus. This is causing people to lose their jobs. In the past few weeks, unemployment claims have skyrocketed to 3.3 million. Because of this influx in claims, claims are not getting processed timely, so claimants are not receiving benefits.
Monthly income has, on average, dropped by $2,112 due to the coronavirus. Because many Americans live paycheck to paycheck, many are broke. They are down to their last few dollars, unsure how they will pay for food and other essentials. While some landlords are waiving rent and the government is supposed to be sending Americans stimulus checks to help during this crisis, for many, it will not be enough. In fact, more than 20% of Americans say they will not be able to pay their bills this month. Only 12% have enough in savings to last them for two months. It’s expected that consumer bankruptcy filings will rise in the next few months.
So what, if anything, can consumers do to prepare for the financial implications of COVID-19? Experts say to stop paying down debt. While this may go against what you have been told—especially if you have been trying to raise your credit score—the goal right now is to make sure you have money on hand to cover your essentials. Food, clothing, shelter—and of course, toilet paper—are important right now. While it’s always good to think positive, you need to prepare for the worst—and it’s believed that things will get worse before they get better.
If you are facing financial difficulties and think you may be unable to pay your mortgage, rent or credit card bills, make sure to let your creditors know. Simply ignoring the situation will only make matters worse. Don’t be ashamed to ask for help. You’re not alone—millions of others are in the same boat as you.
Ask your creditors for modified payment plans. Some may be able to reduce payments or even waive them altogether. This can help you with your credit score, but that should not be your only concern. You can always rebuild your credit score. Your family should come first, and not being able to pay for groceries can have detrimental effects. It is much harder to bounce back from that type of situation.
Contact a Coral Springs Bankruptcy Attorney
While it’s important to get credit card debt paid down, in a crisis such as one that Americans are facing now, saving up for essentials is more important. Take the proper steps to prevent bankruptcy later.
If you are struggling financially during this difficult time, the Coral Springs bankruptcy attorneys at the Law Offices of Barry S. Mittelberg, P.A. will be there for you. We can help deal with creditor harassment, mounting debt and other financial issues you may be facing. To schedule a free consultation, call (954) 752-1213 today.