Cobalt Advisors and Credit 9 have joined Saxton Associates and Hornet Partners in flooding the market with debt consolidation and personal loan offers in the mail. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect. The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2020 Reviews, the personal finance review site, has been following Carina Advisors (also known as Corey Advisors, Pennon Partners, Jayhawk Advisors, Clay Advisors, Colony Associates, and Pine Advisors, etc.).
The ongoing Coronavirus pandemic continues to cause financial problems for people across the globe. Unemployment is increasing, and because of that, people are struggling to make ends meet. With that said, there’s still hope if you can’t pay your bills. You just have to be smart about which payments you should make first so that you run into the least amount of problems in the future. Here’s what you must know.
Prioritize Essentials When You Can’t Pay Your Bills
The first step you must take when you can’t pay your bills is to prioritize your essentials. This means that you must pay off the bills for necessities such as food, utilities, and rent or mortgage (shelter). Other necessities may include child care, transportation, and phone service – this will depend on your work and whether you have children or not.
What You Can Do to Prevent Homelessness
You can request forbearance from your mortgage lender if you can prove your financial struggle because of the effects of CVOID-19 and if you have a federally-backed mortgage. You must also get in touch with your lender if you’re about to miss one of your mortgage payments. In that situation, you can also consider speaking to a housing counselor for further assistance. However, the counselor should be from the U.S. Department of Housing and Urban Development. You shouldn’t be homeless if you can’t pay your bills.
You can also get in touch with a housing counselor if you’re living on rent. There are some organizations that help prevent evictions, especially during these times.
Address the Second-Level Priorities When You Can’t Pay Your Bills
The next level of priorities you must address are your child support, insurance, and tax payments. Missing out on even one payment can cause problems for you. Failing to pay taxes or child support may result in the IRS seizing money directly from your bank account and taking a portion of your monthly wages. On the other hand, your insurance policy may lapse if you continuously can’t pay your bills.
What Are Your Options for Making these Payments?
If you’re unable to make your child support payments, you can go to court and try to reach a new agreement that’s workable for you at this stage in your life. Furthermore, if your insurance premiums are too high, you can speak to your agent and revise your policy.
You can possibly remove some coverages which are increasing your premiums, or you can look into some discount options that you may be eligible for. Some insurers offer discounts to long-term policyholders. Your best bet is to communicate with your agent to learn more about which options you qualify for.
In light of the current pandemic, the IRS has extended the deadline for tax filing to the 15th of July. This will make things slightly easier for you if you can’t pay your bills due to the effects of COVID-19. In addition to that, certain tax agencies are also offering people payment plans if you can’t pay all that you owe at once.
Address the Rest of Your Bills
Only after you’ve taken care of the essentials and the second most important payments, you must move on to the rest. The good news is that you can get a forbearance on certain loans. Forbearance is a process in which you can temporarily halt your payments for some of your loans. Look for the best way to consolidate your debt.
Your student debt loan is one loan for which you can request forbearance. This way, you won’t have to worry about this loan during this time, and missing payments won’t hurt your credit score. What’s more, interest on federal education loans has been waived for the duration of this pandemic. This means that your loan amount won’t increase by requesting forbearance in this case.
Missing Out on Loan Payments Can Adversely Affect Your Credit Score
If you ever find yourself in a position in which you can’t pay your bills, you must remember that missing even one payment for a loan can adversely affect your credit score. The effects will be greater if the amount of the payment is larger. So, you must always try to either make those payments or request forbearance when you can. Lower credit scores can make it significantly harder for you to qualify for a loan. Even if you do qualify for a loan, you may not qualify for low interest rates, like you would with better a credit score.
Look for Different Options for Your Car Loan Payments
If you’re making payments for your car loan, you can consider credit card refinancing vs debt consolidation if the remaining debt amount is lower than the cost of the car. This can be a good option when you can’t pay your bills because you can qualify for a lower interest rate through this process. As a result, you’ll have to pay off a smaller loan amount, making your expenses more manageable. However, you must note that you may need a good credit score to qualify for a low interest rate when refinancing the loan.
If refinancing your car loan isn’t a viable option, you can also consider selling off your current car for a cheaper one. However, it may be difficult to sell your car if the car’s value is lower than what you owe. In that case, you can consider getting a personal loan to pay the difference in what you owe for the car loan.
A Few Additional Options to Consider When You Can’t Pay Your Bills
If you can’t pay your bills, you can contact your credit card issuer and ask them if they’re offering any kind of relief options. Some issuers are allowing some of their customers to skip a monthly payment without any kind of penalty. In addition to that, you could also look into debt management plans from credit counselors, or you can declare bankruptcy. With that said, declaring bankruptcy can have long-lasting effects on your financial health, so only consider that as the last option.