Editor’s note: 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.
RALEIGH – Since the COVID-19 pandemic began, financial assistance has been made available to consumers who have experienced significant financial impact. In the Credit Counseling industry, for instance, agencies have teamed up with the Financial Counseling Association of America (FCAA) and the National Foundation for Credit Counseling (NFCC) in cooperation with major creditors to provide financial counseling and payment relief for those at risk of falling behind on credit card debt due to the financial impact of the pandemic.
Despite the work that has been done across all sectors to address the financial needs of consumers, not everyone who qualifies is using the financial assistance they are eligible for.
Recently Credit Karma published surprising survey results that indicated nearly 80% of consumers who had been financially impacted or lost employment due to COVID-19 were not utilizing the financial relief available to them.
Mike Croxson
While nearly 80% of survey respondents indicated that they were aware that financial relief was available, many indicated that they simply didn’t know how to get started applying for the assistance they needed. Only 20% reported that they were utilizing assistance to address the financial crisis they were facing as a result of the pandemic.
While reports like this may not paint the whole picture of everyone who has been impacted in the United States, they do point to a potential gap that exists between consumers who would most benefit from resources and assistance in the wake of COVID-19, and those who are utilizing these resources.
Financially Vulnerable Are Disproportionately Impacted
Recent data shows that the financial impact of the pandemic is being felt more acutely by those who are most financially vulnerable. Before the pandemic, not only were these consumers already facing a challenging financial reality, they were more likely to be in low-wage jobs that can’t be done from home, resulting in significantly higher rates of unemployment than in higher wealth demographics.
For consumers who have been impacted by historic unemployment rates and a scary financial landscape, there are financial resources available to help. Options that span community-based programs to federal financial relief have been created and expanded. However, finding and utilizing these resources can be a challenge.
Here are some tips to help consumers begin to navigate the options for financial relief that can help them begin the recovery process.
Unemployment Benefits
A new federal law was signed in March of 2020 that expanded unemployment insurance for displaced workers as a result of COVID-19. Many who would not have been previously covered by unemployment benefits are now eligible to take advantage.
According to guidelines available through the Department of Labor, you may be eligible if:
- Your employer permanently or temporarily laid you off due to coronavirus
- Your employer reduced your work hours due to coronavirus
- You are self-employed and have lost income due to coronavirus
- You’re quarantined and can’t work due to coronavirus
- You’re unable to work due to a risk of exposure to coronavirus
- You can’t work because you’re caring for a family member due to coronavirus
Taking advantage of unemployment benefits begins with filing a claim in the state where you worked. Depending on the state, you may be eligible to file a claim a variety of ways including in person, by telephone, or online. The U.S. Department of Labor offers a guide to help you get started through the Unemployment Benefits Finder. It may take persistence to get the assistance you qualify for, but don’t give up!
Housing Assistance
The CARES ACT provides mortgage protection and assistance to those impacted financially by COVID-19. Here are some of the specific provisions included to protect consumers:
- Your lender may not foreclose on you for a minimum of 60 days from the date the law was signed. Lenders and servicers cannot initiate a judicial or non-judicial foreclosure against you, or from finalizing a foreclosure judgment or sale during this time.
- You have a right to request a forbearance for up to 180 days if you have experienced financial hardship. You also have the right to request an extension for up to another 180 days after the initial request for forbearance. The loan servicer for your loan must be contacted to request this forbearance.
Forbearance does not include payment forgiveness. You must understand the specific conditions of the forbearance as there can be multiple options, depending on your loan.
Additional Resources and Benefits
There may be other options available to help. Options may include healthcare or food and nutrition. The Benefit Finder at Benefits.gov can help you locate supplemental benefits that you haven’t considered.
Benefits.gov does not administer benefits or accept applications for benefits, but they are an excellent clearinghouse to help guide you through the process of locating resources and getting started with the application process.
Creditor Hardship Programs
If you are finding that it’s difficult to maintain your debt obligations during this time, many creditors have created hardship and forbearance programs to help. Options available to consumers may include the ability to defer monthly payments for up to 60 days as well as connecting them with financial education and support from a non-profit credit counselor.
If you are experiencing financial difficulty and are looking for a solution, CESI is here to help. Our counselors are available to assist if you are experiencing job loss, temporary loss of income, or financial hardship during this time. Contact us today for a free financial assessment with one of our certified credit counselors.
