How to deal with bills you can't pay

How to deal with bills you can't pay

No money coming in is terrifying, but don't panic. Take a deep breath and look for financial relief.

McClary told NBC News BETTER that communication is important whether you have finances or not. "Contact your credit card company and other lenders. These lenders are looking on methods to support people at this difficult time, so be honest about your financial situation. They may not publish details, so you should ask. You could get into trouble if you don't ask inquiries.

Where to start

Recalibrate. List your expenses and income/savings to pay them.

Create an emergency budget to stretch your cash.

Bankrate.com's chief financial analyst says cash is king. “Whether you've lost your job or think you might, cut back or eliminate expenses. This will free up cash for other uses.

Food, shelter, utilities, medical care, and transportation should be prioritized. Cut, eliminate, or postpone spending on entertainment, takeaway, and subscriptions.

NerdWallet personal financial expert Kimberly Palmer suggests looking at regular payments to cut back.

Some consumers join up for many music streaming services when they just need one, said Palmer. "See what monthly expenses you can cut."

Can I pay my bills?

Paycheck to paycheck people may struggle to pay rent, mortgage, and auto loan. In that case, be proactive.

"Call your landlord/lender. Some are granting extensions or waiving late payments, Palmer added. Protect your credit score for long-term financial security by paying bills on time or calling the company if you can't.

Utilities around the country are preparing for an unprecedented disaster. Waiving late penalties, averting shut-offs, putting up deferred payment plans, and giving low-income households emergency assistance. This information should be online.

Credit cards

Recent Fed rate cuts will lower credit card interest rates, but the drop won't be significant for most individuals.

Many credit card firms have introduced aid programs. You may be able to arrange a temporary credit limit increase, interest rate decrease, or forbearance - missing a payment without a late penalty, but interest still accrues.

Some companies go further:

Apple card (sponsored by Goldman Sachs) emailed members about its Customer Assistance Program, which allows them to skip their March payment without interest.

American Express told NBC News BETTER it might waive late fees, return check costs, and interest charges.

Capital One is working with consumers to reduce fees, reduce minimum payments, and postpone loan installments.

“Being able to avoid interest and credit hits is huge,” says CreditCards.com analyst Ted Rossman. "You need to tell your card issuer about your situation, because even waivers aren't automatic." Contact them."

Rossman believes "desperate times call for desperate measures" If you need cash, put essentials before credit card obligations, he suggested.

Sign up for a 0% balance transfer credit card to improve your cash flow and save money long-term. Some cards halt interest for a year or more. CreditCars.com lists no-fee balance transfer cards.

Have a cashback card? It may be time to cash in rewards to pay bills.

Student loans?

Trump suspended interest on federal student loans last week until the national emergency ends. Mark Kantrowitz, publisher and VP of research at Savingforcollege.com, says implementation details are vague.

If a borrower is hurting financially, there are options for federal student loan relief, Kantrowitz said. These include economic difficulty, unemployment, forbearances, and income-driven repayment arrangements.

Those with private student debts should contact their lender. Forbearance, grace periods, decreased rates, and interest-only payments are offered.

There's one-on-one counseling.

The National Foundation for Credit Counseling (NFCC) is a network of nonprofit groups that offer financial counseling, budgeting, and debt-repayment help. They'll help if you're overwhelmed. Free consultation.

McClary said the counselor will explain what to focus on, what resources are available, and how to use them. If you require direct aid with creditors or a mortgage lender, these services can help.

 

Cherish every day and your life will be magical

 

(Article source: Millions of Americans will soon run out of money. Here's how to deal with bills you can't pay.)

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