financial stress Archives

COVID-19: Forbearance and Debt Repayment Relief

by ryanwangman | Apr 30, 2020 | Blog

COVID-19: forbearance and debt repayment Relief. If you’ve lost income due to the coronavirus pandemic there may be options to temporarily reduce or stop loan repayments.

Millions of people across America are now facing unexpected financial difficulties due to the Coronavirus/COVID-19 pandemic, and many are finding it hard to stay on top of their bills, such as rent, utilities, cell phone service and student loans.

In the five weeks since the pandemic shutdown reached its full height in mid-March, more than 26 million Americans have applied for unemployment benefits. That number accounts for the significant number of people experiencing temporary or permanent unemployment.

If you are one of the many who have lost their jobs, been furloughed or experienced a pay cut due to the COVID-19 pandemic, you have a variety of debt repayment options available to you through your lenders and creditors. One option may be forbearance (also known as deferred payments), which is an agreement with a lender or credit allowing the borrower to postpone or stop loan payments for an agreed-upon duration of time.

Are My Debts Eligible for Forbearance? What Does It Mean If They Are?

When most people use the term “forbearance,” it’s often linked to home mortgages, but any lending agreement you’ve entered into may be eligible for deferred or suspended payments.

The drastic and sudden economic impact of the COVID-19 pandemic has led many creditors and lenders to offer special repayment options on a multitude of debts. This includes mortgage payments, student loans, auto loans, credit card balances, utilities, property taxes and small business loans, though this list is not all-encompassing.

Your lenders and creditors may agree to allow decreased or delayed payments for a specific time period up to 12 months, depending on the deal you strike with them. They might also offer to reduce the interest rate you’re being charged on your debt, though there are no federal guidelines outlining detailed terms for forbearance agreements, so your options may differ.

If You Need Specific Info on Eligibility for Your Debts, Talk to Your Lender or Creditor

For forbearance agreements during the COVID-19 pandemic, each lender and creditor has created their own programs and rules. Eligibility for those programs depends on your particular lender or creditor. To learn more about setting up forbearance or about the other options available to you, including options outside of forbearance, contact your lender or creditor directly.

Importantly, you cannot simply miss a payment and expect to be off scot-free without communicating with your lender about your situation. Your credit standing could be compromised unless you work out a deal with your lender before stopping payment.

Forbearance may help you deal with your short-term financial difficulties and assist you in getting back on your feet, but it doesn’t come without its drawbacks. If you enter into a forbearance agreement, you’re not getting a gift or “free money. You may still need to repay interest that accrues during your approved deferral period, and late fees might still apply, depending on your agreement with your lender or creditor. Ask them directly if you have more questions on how and when any fees may be applied, and how they will report your forbearance agreement to the nationwide credit reporting agencies.

How Do Forbearance or Deferred Payments Work for Different Types of Debts?

If you’re currently facing financial hardship due to a layoff, furlough or pay cut, reach out to your lender or credit to learn more about their options for debt repayment programs and whether you’re eligible. The following details some of the special forbearance arrangements that have been prescribed by the Coronavirus Aid, Relief, and Economic Security (CARES) Act for different scenarios you may be facing now:

Mortgages

Fortunately for people who are struggling to keep up with mortgage payments, federal officials have announced a temporary nationwide halt to foreclosures and evictions for federally-backed mortgages. People who have suffered a loss of income due to the COVID-19 pandemic can qualify to reduce or suspend payments for up to 180 days, with specifics depending on their particular situation.

Borrowers whose mortgage loans are backed by Fannie Mae or Freddie Mac, which underpin the majority of loans in the United States, or by the U.S. Department of Veterans Affairs (VA), the Federal Housing Administration (FHA) or the USDA are eligible for help, including options for forbearance and delayed payments. You must contact your loan servicer to request this forbearance.

To combat ongoing misinformation, the Federal Housing Finance Agency reiterated at the end of April that borrowers in forbearance with a federally-backed mortgage are not required to repay the missed payments in one lump sum. Your mortgage servicer will contact you about 30-days before the end of the forbearance plan to see if the financial hardship has been resolved and discuss your repayment options.

You can search for your loan on the FannieMae.com and FreddieMac.com websites to determine whether one of them has purchased your loan from your original lender or call your mortgage servicer directly. In addition, Fannie Mae and Freddie Mac have halted foreclosures and evictions during the Coronavirus/COVID-19 pandemic, so visit their websites for regularly updated information on how to get relief.

If your loan is not federally backed, you will have to call your mortgage servicer to find out whether they offer any COVID-19 pandemic relief. Review your monthly statement or visit your mortgage servicer’s website for information on how to contact a customer service agent.

If you’re a homeowner who doesn’t know what company backs your mortgage, you can find more information about the federal foreclosure and eviction moratorium and related Coronavirus/COVID-19 actions on the U.S. Department of Housing and Urban Development website.

Student Loans

For most federally held student loans, payments and interest are automatically suspended through September 30, 2020, though that date may be extended with additional legislation. You do not need to take any action for this to take effect.

However, some student loans do not qualify for this benefit, including loans under the Federal Family Education Loan (FFEL) Program, private student loans that are owned by commercial lenders and some Perkins Loans that are held by the institution you attended. To request a forbearance agreement or delayed payments on these loans, contact your loan servicer.

(And remember: If you find yourself with additional cash and are able to continue making your payments, even though none are required for the time being, you’ll chip away at your debt and better position yourself for financial security after the COVID-19 pandemic is behind us.)

Auto Loans

A significant number of auto lenders are offering forbearance agreements or deferred payment plans during the pandemic. This includes options for existing customers as well as those looking to purchase a new vehicle. Contact your lender or automobile manufacturer to learn more about their specific deals.

Credit Cards

Every credit card company has different options and eligibility requirements for forbearance or payment deferrals on your credit card debt. Some may allow you to defer payments while interest continues to accrue over a set period of time, while others may offer to reduce your interest rate or principal payments temporarily. Go to your credit card issuer’s website to learn what options are available and what you have to do to get help. Even if your credit card company isn’t offering a plan that works for you today, it might add new options in the near future, so check back frequently for updates.

Utilities and Property Taxes

Many cities and states across America are offering relief options for utility bills and property taxes to those impacted by the COVID-19 pandemic. This may include forbearance or deferred payments. Call your local municipality or utility provider for details.

Small Business Loans

The federal government has committed a significant amount of disaster relief money to small business owners who have been impacted by the COVID-19 pandemic. The original CARES Act included a provision called the Paycheck Protection Program, which provided small business loans that are fully forgivable in many circumstances, making the money similar to a grant. Businesses have to apply for the loan, which was designed to cover about two months of payroll expenses. Although the initial tranche of money has run out, Congress recently passed another bill with hundreds of billions of dollars in additional funding for small business loans.

If you are a struggling business owner, the Paycheck Protection Program may give you an alternative to requesting forbearance or deferred payments, and buy you some time to get back on your feet. Read more about small business relief options at the U.S. Small Business Administration website.

This information may change as the COVID-19 pandemic evolves, and we’ll continue to provide up to date information as it does.

How Soon Will I Get My Stimulus Check?

by ryanwangman | Apr 17, 2020 | Blog

How soon will I get my stimulus check? How the IRS plans to send out stimulus checks from the CARES Act and when you can expect to get yours.

Much of the American economy has moved online as the country makes an effort to curb the spread of the Coronavirus/COVID-19 pandemic, and the abrupt shift to the internet has left millions of people either unemployed or forced to adjust to an unfamiliar normal. Fortunately, the federal government recently passed legislation that will send some short-term financial relief to those in need.

As a result of the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in late March by Congress, a majority of adults across the country will receive a one-time stimulus check of $1,200, though the exact amount depends on a person’s income. Married couples without kids making below a specific amount will get a total of $2,400, and those with kids will receive an extra $500 for every eligible child age 16 or under. To get a check, you do not need to apply.

Now that the legislation has passed and the government is gearing up to turn this program from a hypothetical into a reality, the main thing people want to know: How soon will I get my money? The quick answer — it’s complicated.

How Soon Will I Get My Stimulus Check?

What You Need to Qualify for a Coronavirus/COVID-19 $1,200 Check

Before we detail when your check from the Internal Revenue Service will arrive, you need to understand how much you’ll be receiving, if any at all.

The IRS will determine if you’re qualified for the check by using your 2019 tax return. If you have yet to complete your 2019 taxes, the I.R.S. will use your 2018 return. If you have yet to file that, you can give the agency a 2019 Social Security statement showing your income.

You will receive the full $1,200 amount if you are a single adult with a Social Security number and your income is $75,000 or less. The threshold to receive the full $2,400 for married couples filing joint returns is $150,000. In addition to the $2,400, married couples will also receive $500 for every eligible child.

The stimulus check is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. If you are a single filer making over $99,000 or a joint filer with an income exceeding $198,000, you are not qualified for a stimulus check.

Unfortunately, if you are claimed by your parents as a dependent (which includes many high-school and college-aged people), you are also ineligible for a stimulus payment.

How Soon Will You Receive Your $1,200?

The exact date you’ll receive your check depends on your situation, but the IRS has already started to send electronic payments to millions of people across the country.

How quickly you’ll get that money primarily depends on how you filed your taxes. Electronic payments can be quickly sent out by the IRS, but other methods require the agency to print and distribute paper checks, which adds extra time to the process.

To find information about your specific check, the IRS has released an online tool enabling you to track exactly when you’ll get it. To track your stimulus check, you’ll have to input your social security number, your birthday, your address and your zip code — provided you filed your 2019 or 2018 tax return. If you are a qualified non-filer, there are extra links on the IRS’s website to input your information so you can still get your money.

On April 2, Treasury Secretary Steve Mnuchin said qualified Americans who have signed up for direct deposit payments should get them within two weeks, a process which is currently ongoing. A spokesperson for the Treasury Department expects 50 million to 70 million Americans to get their money via direct deposit by April 15, according to The Washington Post.

What If I Didn’t Sign Up for Direct Deposit?

However, if you need a paper check and didn’t sign up for direct deposit, you might have to wait for a bit. $30 million in paper checks for millions of people across the country won’t begin being distributed until April 24 or longer because the government doesn’t have their banking information.

Paper checks will reportedly be sent to lowest-income Americans first, beginning on April 24 with individual taxpayers that make $10,000 or less, per to an internal IRS plan obtained by The Washington Post. After that, checks will be sent to people earning $20,000 or less, sent in the mail May 1, followed by stimulus payments for people with incomes of $30,000 on May 8, $40,000 on May 15, and continuing in increments of $10,000 weekly.

Under the proposal, this process will keep going until paper checks are sent out on Sept. 4 to joint taxpayers making the maximum that are still qualified for a stimulus payment. All other paper checks will be sent out on Sept. 11, primarily to those the I.R.S. did not have prior tax information about. The IRS plans to distribute roughly 5 million checks each week.

For more information on your specific situation, please visit the IRS’s coronavirus stimulus payment resource center, linked here. We will update this article as the situation evolves and the payment process begins.

Coronavirus: Financial Stress Statistics 2020

by LizStevens | Apr 15, 2020 | Blog

Coronavirus: financial stress statistics 2020. Recent research focuses on how COVID-19 has negatively impacted personal finances in the U.S.

The coronavirus continues to spread across the U.S. but over 40 percent of Americans are more worried about losing their jobs and making rent than they are about getting sick.

With the economy at a standstill, financial stress is at an all-time high. Recent surveys have asked Americans to open up about the impact the pandemic has had on their finances.

Coronavirus: Financial Stress Statistics 2020

How Has the Coronavirus Impacted Financial Stress?

According to research by Freedom Debt Relief:

27 percent of Americans have already experienced a furlough, layoff or job loss because of the pandemic.
56 percent of Americans are concerned about being able to afford to feed themselves and their families.
45 percent are struggling to make their rent or mortgage payments and 36 percent say they are likely to miss a payment in the next six months.
38 percent say they will miss a utility payment within the next six months.
30 percent are likely to miss their health insurance premium or a student loan payment in the next six months.
36 percent anticipate carrying a balance on their credit card for groceries.
21 percent anticipate carrying a balance on their credit card for utilities.
18 percent anticipate carrying a balance on their credit card for TV/Internet.

How Do Americans Plan to Spend Their Check from the CARES Act?

According to research by Crediful:

47 percent plan to spend their stimulus check on groceries.
46 percent plan to spend it on utilities.
42 percent plan to put it in savings.
28 percent plan to spend it on their rent or mortgage.
26 percent plan to spend it on their credit card debt.
16 percent plan to spend it on toiletries
13 percent plan to spend it on health or medical supplies.
10 percent plan to spend it on stocks and investments.
9 percent plan to spend it on student loan debt
7 percent plan to spend it on clothing.

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COVID-19 2020: Managing Employees During the Coronavirus Pandemic

by LizStevens | Apr 8, 2020 | Blog

COVID-19 2020: Managing employees during the Coronavirus pandemic. Dealing with employees who may be sick and making temporary policy modifications.

More than 70 percent of companies didn’t have a crisis management plan in place when the Coronavirus outbreak hit, according to a survey by Blank Rome. Even those who did anticipated natural disasters like floods and fires, but not a global pandemic like COVID-19.

Without an emergency response plan in place, how are employers dealing with things like emergency contact systems, data privacy, defining essential functions, managing employees who become ill and avoiding panicked reactions to negative news?

COVID-19 2020: Managing Employees During the Coronavirus Pandemic

Here are some of the temporary modifications employers told Blank Rome they’ve made in response to the Coronavirus pandemic:

We are following CDC guidelines; if an employee is sick we are sending them home.
We started specific weekly communications on March 3rd regarding precautionary personal and workplace hygiene, staying home or going home if ill, social distancing. We applied more specific polices on March 13th and formally implemented work from home as well as rotational work assignments.
We extended the absence period for returning to work from 3 to 5 days and on a case by case basis in some instances.
We have released anyone with symptoms and required doctors notes to return.
We’ve requested all employees to get tested and made arrangements for the testing to get done.
We are operating on the honor system for absences or modifications and accommodations during this time.
We are asking screening questions and are considering temperature checks.

Responding to Employee Testing Positive for COVID-19

Nearly 7 percent of the companies Blank Rome surveyed had an employee test positive for COVID-19 and in response to it:

23 percent of employers converted to remote work for all employees not required to be on-site.
17 percent continued operations with modifications.
3 percent closed the entire worksite where the employee who tested positive reported.

Managing Paid Time Off

Over 40 percent of employers have paid employees who show symptoms of COVID-19 but haven’t been diagnosed or allowed them to use paid time off. Nearly half of businesses that have had to temporarily shut down business operations are still paying workers and more than 20 percent are requiring use of paid time off.

Managing Employee Complaints

Less than 15 percent of employers have received COVID-19-related complaints from employees, but more than 90 percent have required responses that don’t fall within the traditional framework of complaints, including disability discrimination, retaliation and OSHA. Here are some of the COVID-19-related complaints employers have received:

Employees requesting shutdown.
Employees complaining about lack of sanitizer and masks.
Employees frustrated about working remotely.
Employees complaining the company failed to act quickly and put inexperienced people in charge of decision making.
Employees complaining that there isn’t a policy in place.
Employees upset about being required to come into work when they think they should be allowed to stay home during the Coronavirus outbreak.
Employees concerned about how matters will be handled.

How employers respond to the Coronavirus pandemic will have a significant impact on business for years to come. It’s crucial to empathize with employee concerns and communicate what the company is doing to protect both employees and business operations.

Helping Employees During Coronavirus/COVID-19 Pandemic

by LizStevens | Mar 31, 2020 | Blog

Helping employees during Coronavirus/COVID-19 pandemic. How you support workers during the outbreak could have a lasting impact on recruitment and retention efforts.

What will you say when asked how you helped employees during the COVID-19 outbreak?

We are in the midst of a crisis. The Coronavirus/COVID-19 outbreak is dramatically reshaping the working world. Healthcare workers, delivery drivers and grocery store shelf stockers are being overworked while waiters, bartenders, musicians and those in the hospitality industry are dealing with shutdowns, layoffs, and unemployment. All of them are looking to their employers for help to get through this uncertain time.

How employers respond to the Coronavirus/COVID-19 pandemic will have a significant impact on recruiting and retention efforts for quite some time.

Helping Employees During Coronavirus/COVID-19 Outbreak

Employees at all levels are dealing with increased financial stress. Nearly 60 percent of Americans say the Coronavirus has had a negative impact on their finances, according to a survey by the National Financial Educators Council. Over 40 percent of them are more concerned about their personal finances than they are about contracting COVID-19.

There are a number of ways employers can support employees during the Coronavirus/COVID-19 pandemic. These are a few areas some organizations are zeroing in on and others where the U.S. government is providing assistance:

Financial Wellness

Employees want to know how the Coronavirus is going to impact their retirement savings, their monthly budget, their credit card debt, their paycheck and they want to know what they should do about it. Best Money Moves, a mobile-first financial wellness platform, just added new resources to answer employees’ questions about how the Coronavirus will affect their finances and for a limited time, new clients can get Best Money Moves free for the first three months.
Paid Leave

The Families First Coronavirus Response Act (FFCRA) mandates certain employers provide up to two weeks of paid sick leave related to COVID-19. Employers who provide paid sick leave under the FFCRA will be eligible for two new refundable payroll tax credits that the IRS will “immediately and fully reimburse” according to the IRS and the U.S. Department of Labor. The Coronavirus Aid, Relief, and Economic Security Act (CARES) provides almost $350 billion in partially forgivable loans to small businesses and nonprofits with 500 or fewer employees impacted by COVID-19 to help cover payroll and temporary closings.
Unemployment Resources

Some employers, especially small businesses, will have to layoff and furlough employees during the Coronavirus/COVID-19 outbreak. Whenever possible, employers should provide severance pay, extend health benefits and give a tentative rehiring date if the business plans to remain open. Employers should also help employees navigate the unemployment process.
Mental Health

Mental health platforms that offer teletherapy have noticed a surge in usage during the Coronavirus/COVID-19 pandemic. People are anxious, depressed, isolated and lonely as they socially distance themselves and stay home to limit the spread of the Coronavirus. Providing resources for those who are struggling with their mental health during this crisis is important. Employers should evaluate their current mental health benefits and consider telehealth solutions.
Virtual Recruiting

Employers in essential services are struggling to fill open positions and comply with social distancing restrictions. CVS Health will fill 50,000 full-time and part-time positions through virtual job fairs, interviews and job tryouts. Walmart is shortening its hiring process to hire associates “in as little as 24 hours” to meet its goal of hiring 150,000 new workers by the end of May. Employers who were in the process of evaluating and interviewing top talent who still need to fill the position and have the budget to do so shouldn’t suspend the hiring process until the Coronavirus outbreak is behind us. Instead, those employers should look to virtual solutions like video conferencing for interviews.

This is a defining moment for business leaders around the world. Years from now potential hires will ask employers what they did to support employees during the Coronavirus/COVID-19 pandemic. What will your organization have to say when that time comes?

COVID-19: Forbearance and Debt Repayment Relief

Are My Debts Eligible for Forbearance? What Does It Mean If They Are?

If You Need Specific Info on Eligibility for Your Debts, Talk to Your Lender or Creditor

How Do Forbearance or Deferred Payments Work for Different Types of Debts?

Mortgages

Student Loans

Auto Loans

Credit Cards

Utilities and Property Taxes

Small Business Loans

More on Topics Related to COVID-19: Forbearance and Debt Repayment Relief

How Soon Will I Get My Stimulus Check?

How Soon Will I Get My Stimulus Check?

What You Need to Qualify for a Coronavirus/COVID-19 $1,200 Check

How Soon Will You Receive Your $1,200?

What If I Didn’t Sign Up for Direct Deposit?

More on Topics Related to Coronavirus Relief:

Coronavirus: Financial Stress Statistics 2020

Coronavirus: Financial Stress Statistics 2020

How Has the Coronavirus Impacted Financial Stress?

How Do Americans Plan to Spend Their Check from the CARES Act?

More on Topics Related to Coronavirus and Financial Stress

COVID-19 2020: Managing Employees During the Coronavirus Pandemic

COVID-19 2020: Managing Employees During the Coronavirus Pandemic

Responding to Employee Testing Positive for COVID-19

Managing Paid Time Off

Managing Employee Complaints

More on Topics Related to COVID-19 2020: Managing Employees During the Coronavirus Pandemic

Helping Employees During Coronavirus/COVID-19 Pandemic

Helping Employees During Coronavirus/COVID-19 Outbreak

Financial Wellness

Paid Leave

Unemployment Resources

Mental Health

Virtual Recruiting

More on Topics Related to Helping Employees During Coronavirus/COVID-19 Pandemic

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