The Discerning Investor by Julie Jason

What To Do If You Have Trouble Paying Your Bills?

COVID-19 has had an effect on all of our lives, affecting not only health, but also jobs and personal finances. Some people are encountering new challenges, such as being unable to pay bills on time.

A July survey of the pandemic’s financial impact released by TransUnion, one of the three major consumer credit-reporting agencies, showed that concern about being able to pay bills and loans was at 77% for consumers who were financially impacted by the pandemic, rising to 87% for those who had lost their jobs. Credit card bills were the biggest concern of those surveyed, followed by utility bills, mobile phone bills and rent payments.

The TransUnion survey also found that nearly one out of three renters said they would not be able to pay their rent.

Liane Fiano, engagement and outreach specialist at the Consumer Financial Protection Bureau (CFPB), a U.S. government agency, advises that people who are having trouble paying their bills should reach out to their creditors.

When you talk to your creditors, discuss what options you have. You might be able to defer payments or make partial ones, but it’s important to explain your situation fully. Look on your bill for the phone number of the creditor and check out the company’s website to see what information might be available there.

There are some key questions you must ask during these discussions, according to Fiano, including how long a hardship payment situation can last, when you will need to start repaying the obligation, and what happens when the time comes for repayment and you are still experiencing hardships. She advises that you prepare a list of questions in advance so you are sure to cover everything.

If you make agreements with creditors, be sure to check your credit reports to make sure they reflect any agreement you have made. Your payments (or nonpayments) are reported to credit agencies by your creditors and vendors, such as your utility companies, your cellphone provider and your mortgage company (or your landlord), among others. The TransUnion poll found that more than a third of consumers indicated monitoring their credit was very or extremely important, with an increase to 45% for those who had received a financial accommodation.

The poll also found that among those consumers who had accommodations, more than half said they were still making normal payments on their auto loans, mortgages and personal loans.

All three credit reporting agencies -- Equifax, Experian and TransUnion -- are providing free weekly credit reports through April 2021. Visit AnnualCreditReport.com to get more information.

What happens if your situation ends up with a debt collector? The Fair Debt Collections Practices Act details your rights and sets guidelines as to what debt collectors can and cannot do. The CFPB offers help in handling the situation as part of its “Your Money, Your Goals” toolkit. Download “When debt collectors call” at tinyurl.com/y5y3tn6d. Also be sure to check out the other offerings in the toolkit.

To read the full COVID-19 Pandemic’s Financial Impact on U.S. Consumers, Financial Hardship Report by Transunion, go to: tinyurl.com/y3j4g9n6.

The important thing is to be proactive, talk to your creditors and find out your options.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION