Paying bills on time has become a challenge for many Americans, thanks to the novel coronavirus.
But here’s the good news: Cash-strapped individuals have access to a range of relief measures to make monthly bills affordable. The federal government, state lawmakers and private companies have rolled out forbearance and deferment programs to combat the financial woes caused by layoffs, furloughs and other financial setbacks.
One caveat is that late summer and early fall will bring about the expiration of a number of relief options included in the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which was signed into law in March. But in some cases, these measures have been extended or replaced by provisions dictated under President Donald Trump’s executive orders, signed in August.
Some experts note that these presidential measures do not hold the same legislative power as the passage of a stimulus bill in Congress. And extension of relief is essential for the millions of Americans who remain out of work or are experiencing income disruptions. “Things aren’t slowing down,” says Ashley Harrington, federal advocacy director and senior counsel at the Center for Responsible Lending, a North Carolina-based organization that works to ensure fair credit practices. “I think people are still very worried and concerned about their financial and health outlook.”
While it often makes sense to continue paying your bills on time if you’re able, these programs are available to ensure that the hardest-hit Americans can afford essentials such as food and shelter.
Here are bills you may be able to skip, pause or deprioritize during the coronavirus pandemic:
- Mortgage payments.
- Rent payments.
- Student loan payments.
- Credit card bills.
- Bank fees.
- Car payments.
- Utility bills.
To get started, review your credit card and bank statements to tally which bills you’re paying each month. After that, investigate whether relief is provided through some kind of state or federal program or whether you need to call a private company.
Mortgage Payments
If you’re struggling to pay your mortgage, you’re not alone. An estimated 3.8 million American homeowners are now in forbearance plans, according to an August report from the Mortgage Bankers Association.
The federal government – plus, some private lenders – is pausing payments for eligible, struggling homeowners. Your mortgage relief options are determined by whether you have a federally backed mortgage or a private one.
Federal loans are those lent through entities such as the Federal Housing Administration, or FHA, U.S. Department of Veterans Affairs and Fannie Mae or Freddie Mac, among other agencies. The Consumer Financial Protection Bureau website contains resources to determine your mortgage owner.
Under the CARES Act, homeowners with federally backed mortgages may request up to 180 days of forbearance, which gives them a break from making payments, with an additional 180 days upon request.
Forbearance doesn’t forgive payments but puts a pause on them, without accruing additional fees and interest. At the end of your forbearance, you may choose to pay all of your missed payments at once, spread them out over a period of months or add them to the end of your mortgage, according to the Consumer Financial Protection Bureau, or CFPB.
As the initial 180 day forbearance period expires for homeowners, it may make sense sense for them to contact their servicer to request an additional 180 days, which could extend relief for a total of 360 days.
If you have a private home loan, call your servicer or check its website for information on financial hardship programs. “You have to call mortgage servicers and ask for that relief,” Harrington says.
Your state may offer its own mortgage relief options, so investigate what programs are available. And if you can pay your mortgage, you should, according to the CFPB.
Rent Payments
The eviction protections set out under the CARES Act expired at the end of July. To prevent a wave of evictions, Trump issued the “Executive Order on Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners” on Aug. 8.
But experts note that this isn’t a halt on evictions and lacks oomph without real legislative action. Instead it directs certain departments to find ways to provide relief to struggling landlords and tenants. “The idea that this can be done without comprehensive legislation is not possible,” Harrington says.
If you can pay your rent, you may want to prioritize this payment unless stronger relief measures are passed. If there’s not a way to pay your bill, investigate whether your state or municipality has suspended evictions during the COVID-19 pandemic. Some states, such as Pennsylvania, have extended a statewide moratorium on foreclosures and evictions. Talk to your landlord and investigate local housing assistance programs.
Student Loan Payments
Like with mortgage and rent payments, your relief options are tied to who owns your loan. Under the CARES Act, federally held student loan and interest payments are automatically suspended through Sept. 30, 2020. Trump’s “Memorandum on Continued Student Loan Payment Relief During the COVID-19 Pandemic” extends student loan relief until Dec. 31.
With the CARES Act, paused student loan payments count toward loan forgiveness programs, such as Public Service Loan Forgiveness, so participants in those payment plans don’t need to pay their student loan bill to continue making progress toward their forgiveness goal. This is a rare case in which you shouldn’t pay your bill, even if you can afford it.
Within the executive memorandum, it’s not specified whether nonpayments on income-based plans would continue to count during the extended time frame, Harrington notes. It will be worth awaiting more information before making a decision on whether those payments should continue to be halted.
Automatic relief only applies to loans owned by the Department of Education, Harrington says. So if you have Perkins Loans, for example, which may be owned by the institution you attended, you cannot seek an automatic reprieve.
Private student loan holders should contact their servicer. Harrington also notes that some states have partnered with private loan servicers to offer relief to borrowers.
Credit Card Bills
If your credit card payments are unmanageable due to job loss or another income disruption, consider working with your issuer to find some relief. “Right now, many credit card issuers are working with clients,” says Simon Zhen, senior research analyst at MyBankTracker.com.
Credit card issuers may offer forbearance programs, which allow you to push back or reduce payments for a set period of time. They may also nix late fees and penalties.
While you may try calling your issuer to discover your options, there are reports of long wait times. So consider visiting your issuer’s website, which may have a request form to apply for a financial hardship program, Zhen says. Get everything in writing, so you understand when payments resume, whether you’ll owe some kind of bulk payment and whether interest continues accruing.
Bank Fees
Right now, there are lots of opportunities for banks to charge fees, such as account maintenance or overdraft fees. But there’s some good news for Americans experiencing financial hardship due to the coronavirus pandemic. “For banking fees and whatnot, most of those are being waived and refunded,” Zhen says.
You may have to call and ask to have these fees reduced, so monitor your accounts to see if they’re being charged and investigate your bank’s relief options.
Car Payments
Lenders are also working with drivers to provide relief for auto payments during the coronavirus pandemic, Zhen says. Work with your lender to reduce or pause payments while you experience financial hardship.
Utilities
Providers of essential utilities such as gas, electricity and water are working with customers to guarantee continuation of essential services if you can’t pay, Zhen says.
You may have to call and request hardship relief, Harrington says. Check also whether your state or municipality has any relief programs available. Many states have suspended public utility disconnections, according to the CFPB.
The Bottom Line
Your monthly bills from many federal and state entities can qualify for relief. Pausing or reducing your payments to private entities isn’t guaranteed, but many lenders are willing to work with borrowers. Check whether your state has its own hardship programs available.
If you can pay your bills, it’s often a good idea to continue. And if you’re struggling to make ends meet, take advantage of these programs and use the money left over to take care of essentials, including shelter, food and health care expenses, Zhen says. Perhaps this is the time to divert extra cash toward your emergency fund or simply ensure that you can feed your family or pay for health insurance.
Keep an eye on the news. Guidance on the implementation of Trump’s executive orders or perhaps an additional legislative action could impact how aggressively payment is collected on these expenses.
“We don’t when this is going to end and what the overall effects are going to be,” Harrington says. “Just think about your entire financial situation and how you can make it more manageable in the short and long term with this relief.”
