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What to do if you can't pay your bills

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If you have trouble paying your bills, or loans, or paying on time, there are options for help, especially if you reach out early to your lenders or creditors.

If you can still pay your bills, you will likely be better off staying on track. Keep in mind that if you decide to use a program that lets you pause or reduce payments, you will still owe the money you have not paid once the program ends.

If you lose your income

State and local governments vary in the programs and offerings to help those financially impacted by the coronavirus.

In March 2021, Congress passed, and the President signed, legislation providing an additional $300 weekly federal enhancement to all workers entitled to unemployment benefits. The supplement begins after March 14, 2021 and ends on September 6, 2021. The legislation also extends the Pandemic Unemployment Assistance program which provides unemployment assistance to the self-employed and gig workers. Contact your state’s unemployment office or program for information or to apply for benefits.

You can look to your state’s unemployment insurance office or program to identify current options for benefits.

1. Contact your lenders, loan servicers, and other creditors

If you can’t make a payment now, need more time, or want to discuss payment options, contact your lenders to explain your situation, and check their websites to see if they have information that can help you. Being behind on your payments can have a lasting impact on your credit.

The CFPB and other financial regulators have encouraged financial institutions to work with their customers to meet their community needs. Many lenders have announced proactive measures to help borrowers impacted by COVID-19. As with other natural disasters and emergencies, they may be willing to provide:

  • Forbearance
  • Loan extensions
  • A reduction in interest rates
  • Other flexibilities for repayment

Credit card companies and lenders may be able to offer you a number of options to help you. This could include waiving certain fees like ATM, overdrafts, and late fees, as well as allowing you to delay, adjust, or skip some payments. Some lenders are also saying they will not report late payments to credit reporting agencies or waiving late fees for borrowers in forbearance due to this pandemic.

What to say when you contact a lender

When contacting your lenders, be prepared to explain:

  • Your financial and employment situation
  • How much you can afford to pay
  • When you’re likely to be able to restart regular payments
  • Your income, expenses and assets

Be sure to get confirmation of any agreements in writing.

Learn how to talk to your credit card company

Consider working with credit counselors to understand your options

Reputable credit counseling organizations are generally non-profit organizations that can advise you on your money and debts and help you with a budget. Some may also help you negotiate with creditors. These trained professionals provide advice for little or no cost, and they will work with you to:

  • Discuss your situation
  • Evaluate options
  • Help you negotiate with your lenders and servicers

There are specific questions to ask to help you find a credit counseling organization to work with.

Warning: If you’re considering working with a debt settlement company to address your debts, be skeptical of any company that promises to do it for an upfront fee.

2. Keep your money safe

Whether or not you’ve experienced a financial hit, don’t head for the ATM to withdraw more cash than you usually need.

Your money is safe in your bank or credit union account. Unlike money kept at home, you likely have federal protections if money you’ve deposited is taken illegally and in the unlikely event your institution shuts down. You will always be able to get cash when you need it. The professionals restocking cash machines and moving money across the country are on the job and are considered essential service workers.

Generally, all bank deposits up to $250,000 are insured by the Federal Deposit Insurance Corporation. Deposits at all federal credit unions, and the vast majority of state-chartered credit unions, are also insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF).

Here is more from the FDIC Chairman Jelena McWilliams.

3. Take control of your finances

Getting money smart is one of the best ways to be ready for any kind of trouble the future might bring. We also offer a variety of tools including some designed to help you: