The coronavirus pandemic has disrupted the U.S. economy. Millions of people have already lost their jobs, with many more in danger of becoming unemployed in the coming weeks.
Without work, people who don’t have emergency savings are finding themselves in the position of not being able to pay all of their bills.
How to Get Help From Creditors if You’re in Danger of Missing Payments
If you are falling behind on loan payments or credit card bills — or think you might be soon — here’s how to get help from your lender. In order to seek relief from the people you owe money, follow these steps in order.
1. Make a List of All of Your Monthly Bills
The first thing you’ll want to do is to write down a list of who you owe, how much you owe them, the monthly payment and the due date of that payment.
Having all of this information together will make the next step much easier.
2. Prioritize Those Bills
The next step you’ll want to take is to prioritize your bills. Money expert Clark Howard has some very specific and useful advice about how to do this.
In general, if you’re in a cash crunch, Clark says to prioritize spending this way:
- Unsecured debt like credit cards and personal loans
You might have a mortgage payment due, which would fall high on this list. Next would be any vehicle loans you might have. The creditors you’ll want to pay last — but you still want to pay if you can — would be credit card companies and anyone you might have a personal loan with.
The key is that you want to look at what cash you will have available and figure out who you will be actually able to pay as you move down this list from 1 to 5.
Once you arrive at a bill you won’t be able to cover in full, move on to the next step.
3. Contact Creditors You Think You Won’t Be Able to Pay Early and Often
Clark says that the key to getting lenders to work with you when you can’t make a payment is to contact them early and often. You want to make them aware of your situation so that they don’t think you’re simply being delinquent.
Lenders are much more likely to work with borrowers who communicate with them about their circumstances as soon as an issue arises.
“The big thing not to do is hide from this,” Clark says.
4. Follow the Instructions on Your Lender’s Website
Many lenders have set up specific protocols for getting assistance if you’re in a financial bind. If your lender is one of those, you may have more success if you follow that protocol, rather than just call the toll-free number on your card or bill.
Credit reporting agency Experian has compiled an impressive list of financial institutions with coronavirus-related relief offerings and how to access them. You can find it here.
For example, American Express has a specific link where you can chat with a representative about lowering your monthly payment, getting relief from late fees and more. Many other lenders are offering the same.
5. If You Call or Chat, Try Off Hours
If you find that your creditor has not set up a specific process to request relief, you may need to call them on their main customer service number or initiate a chat with a representative.
Many people have expressed frustration to Team Clark about long hold times when they call and huge queues waiting for online chat.
Clark’s advice is to try to call or chat during off hours — even overnight if possible — and to use the callback option if one is available. He also says that if you’re not successful in getting what you need with one representative, you should try with another.
Another option is to attempt to have your case escalated to someone with more authority to make individual relief assistance decisions.
6. Make Sure You’re Realistic and Honest About Your Situation
When you are able to communicate with someone about your inability to pay, it’s important to be upfront about your situation. If the reason you can’t pay is that you’ve been laid off due to the coronavirus, let them know that.
If possible, come with a plan. For example, if you can pay part of your bill now and think you may be able to pay more when you get relief from the government, say so. They may be willing to defer part of your payment to a later date.
7. Try to Get Any Agreement in Writing or a Chat You Can Screenshot
If you are able to reach an agreement with your lender, try to get it in writing.
If you come to an agreement over the phone, ask if they will mail you a letter confirming it. If you are able to get resolution in a chat, screenshot the chat.
You may need to refer to this later if for some reason the lender reneges on the deal or places a negative mark on your credit report even though they had agreed not to.
8. Repeat This Process if You Are Unable to Pay in Coming Months
Finally, no one has any idea how long all of this is going to last. And even though Clark says we will return to normal and jobs will be coming back, it may be a little while.
If you find yourself in the position again next month of not being able to pay all of your bills, you may need to do all of this over again with your lender — unless you are able to reach some longer-term agreement.
The good news is that after having gone through the process once, you’ll have a much better idea what to expect and how to navigate it.
Remember that the earlier you get in touch with your creditors to start the process, the better. There are a lot of people in the same boat, so it may take some time to get the relief you need. Bring patience, and remember that persistence is key.