Editor’s note: Mike Croxson is the CEO of Consumer Education Services Inc. (CESI.)
RALEIGH – There has been a lot of discussion about restarting the American economy in the wake of the COVID-19 crisis. In some places, the local economy may be slowly waking up after weeks of being shuttered, but the financial fall-out isn’t going to end quickly.
The financial impact on consumers has been significant over the last few months. Since the middle of March, Americans have filed more than 30 million claims for unemployment benefits – historic levels that haven’t been seen in the U.S. since 1939. Despite the stimulus relief from the $2.2 trillion CARES Act, which was signed into law on March 27, 2020, families are still struggling to stay afloat financially. Members of Congress have discussed a second round of stimulus checks for consumers impacted by COVI-19, but how much and when we might see any additional funds is uncertain.
From community-based programs to federal assistance programs, there are programs in place to help consumers that have been impacted financially by COVID-19, but it can be confusing and challenging getting the help you need.
If you’re experiencing financial hardship, there’s no need for embarrassment. You aren’t alone and there is a way forward. We want to provide you with some guidance about relief programs that exist to help.
Eliminating some of the expenses for housing, food, or utilities out of your household budget can make your resources stretch further and create additional options for utilizing the funds you have coming in to meet the needs of your family during a crisis.
What Resources Are Available?
As families across the U.S. deal with the physical, emotional, and economic impact of the pandemic, many are also facing another issue: food insecurity. Whether due to household finances or lack of supply (or both), the COVID-19 crisis has made food security a bigger challenge for those who are struggling.
Community-based food assistance programs are located all across the U.S. Families or individuals seeking assistance from local food banks and pantries can locate the nearest one at Feeding America through the “Find Your Local Food Bank” option. This network of food banks secures and distributes 4.3 billion meals each year through food pantries and meal programs throughout the United States.
If you need resources to help with essential services, your local 211.org is an excellent place to start. Local 211 providers across the United States are available to connect people with resources and services in their community, including those who require financial assistance as a result of financial loss due to business closures, job loss, or quarantine.
If you’re a homeowner and can’t make your monthly mortgage payments, there are resources available, but it’s important to contact your mortgage servicer quickly.
The CARES ACT has provisions to cover mortgage protection and assistance. Specifically, the CARES ACT mandates that:
- Servicers of federally backed mortgage loans may not: initiate the foreclosure process, move for a foreclosure judgment, order a sale, or execute a foreclosure-related eviction or foreclosure sale. These specific provisions last a minimum of 60 days beginning on March 18, 2020. Of special note: These provisions are not only limited to borrowers with a COVID-19 related hardship.
- Homeowners with federally backed mortgage loans affected by COVID-19 can request and obtain forbearance from mortgage payments for up to 180 days. They can additionally request and obtain extended forbearance for up to another 180 days after that time. The term of either the initial or the extended forbearance may be shortened at the Borrower’s request. While on forbearance, no late fees or penalties may be imposed, but interest continues to run. The law covers the period during the COVID-19 emergency or until December 31, 2020.
The CARES Act also outlines Protections against eviction for renters. During the 4 months (120-days) beginning on March 27, 2020, the owner of a “covered dwelling” (which means the property has a federally backed mortgage loan) may not file a court action for eviction or charge additional fees for nonpayment of rent. After that period, the owner cannot require the tenant to vacate until it gives the tenant a thirty-day notice.
When financial resources are stretched thin, it may be difficult to make payments for your home utilities. With large sections of the country still under shelter-in-place orders, these services continue to be essential. In response to the significant need, many local utility companies are taking steps to help lighten their customers’ financial burdens through solutions like stopping shut-off orders and waiving late fees. If you are finding it difficult to manage utility bills, reach and contact your local provider to inquire about assistance programs they can provide.
Free Financial Counseling
In the wake of the COVID-19 crisis, consumers may need guidance from professionals to help them navigate through the confusing array of financial options they face in managing household debt. Many creditors have created assistance programs for borrowers who have been financially impacted including
- Payment deferments
- Forbearance options
- Modified payments
A non-profit credit counseling organization like Consumer Education Services Inc. can help make sense of all your options through free financial counseling. Since 1998, CESI has been helping consumers achieve financial freedom by offering a complete life cycle of financial services and solutions. A certified credit counselor can walk you through a financial assessment and help you identify options that can relieve stress, and make it easier to manage a financial setback. If you are looking for a credit counselor in your area, The National Foundation For Credit Counseling offers a nationwide network of agencies. For more than 60 years, NFCC and its member agencies have helped people pay off debt and grow in their financial capability through services and tools designed to help you gain control of your finances.
About the author
Mike Croxson is the CEO of Consumer Education Services Inc. (CESI.) With more than 30 years of experience in the financial services industry, Mike’s skills include a particular focus on adapting new technology to meet the needs of consumers struggling with their financial situation.