During these hard times, you may not know how you’re going to pay your rent, mortgage, and other expenses. If you can’t pay bills because of COVID-19, there are some steps you can take to stay above water.
COVID-19 has hit economies hard. If you’re unable to work or have been laid off, you’re not alone. Before you panic, know that there is help available.
What to Do If You Can’t Pay Bills
From what to say to a private landlord to filing for unemployment, this guide has everything you need to know about paying your bills during the pandemic.
Speak to Your Landlord
If you’ve been impacted by COVID-19 financially, one of the most important things you can do is to tell your landlord. If you can’t pay your rent, your landlord may be able to help you.
If you don’t pay and don’t communicate, they won’t know what to think and will have to assume the worst. This could cause them to be stricter with you than they would be if you simply communicated with them.
Unlike any other economic crisis we’ve had before, everyone is in this together. Literally, all 7.2 billion of us worldwide.
One thing that is working in your favor is that your landlord knows that millions of people are out of work.
If you’re unable to keep up with your rent, tell your landlord openly. Once you talk to your landlord, you can explain how you have been impacted and come up with a plan.
You may be able to work out a solution where you can partially pay, delay payments, or pay a reduced amount until you’re back at work.
Specifically, you could ask for terms such as:
- Reduced rent (say, $100 or $200 off for a fixed number of months)
- Reducing your rent by a fixed amount (say, $200) but adding it back to future rent payments starting in 6 or 12 months. This would decrease your payments now, but increase them in the future when you are hopefully employed.
- Adding one or more new renters to your lease, so everyone’s pro rata share decreases. For example, if you and a friend are renting a 3-bedroom place for $1500 and paying $750 each, you could ask about having a third person move in. Then, you would each owe only $500 per month. Under these usual circumstances, your landlord may be willing to approve this.
If there’s absolutely no way you can pay you rent and you have somewhere safe to go, such as your parent’s house or a friend’s place, you may also be able to avoid having an eviction on your record by explaining your situation to your landlord and mutually agreeing to terminate your lease early.
In this case, the landlord will avoid having you living in their property while you can’t make payments and you will avoid potential court proceedings and damage to your credit score.
Plus, if you and your landlord can’t come up with an arrangement, know that in many states, you are protected from eviction during this crisis.
Check with your state or county’s website to confirm the grace period.
Fannie Mae has also provided some great resources on speaking with your landlord and getting help with rent.
Call Your Mortgage Provider
In the midst of the pandemic, many of the big banks have agreed to delay mortgage payments.
During this time, you may not be penalized for being unable to pay your mortgage. You won’t be charged late fees or have missed payments reported to the credit bureaus.
If you are unable to pay your mortgage, you also won’t be entered into foreclosure or have any legal proceedings take place.
To be eligible for this relief period, the first thing you need to do is contact your mortgage provider. Be open about your ability to pay.
Once your mortgage provider knows your situation, you can come up with a plan together to stay afloat.
The Federal Housing Finance Agency has additional resources regarding these grace periods and how to set up a deferral agreement. Most banks will accept e-signatures for everything as well so you can remain home.
Look at Your Expenses and Income
After speaking with your housing provider, you’ll also want to call your utility companies, cell phone providers, and any other expense you have. To start, if you don’t already have a list of your expenses, make one.
Start by listing out each bill you have, how much it is for, and when it is due. Next, estimate how much you’re spending on groceries and essentials during this new normal. Make calls to the most important people first.
You need your home, your car, and your cell phone above all else.
Your utility company has likely partnered with your local government to ensure that no shuts off will take place during this crisis if you can’t pay your bills.
Call them to confirm you need a grace period.
If you have other memberships or subscription services, consider pausing them for six months until you’re back at work. This is also a great time to cancel any subscriptions you aren’t using anymore.
Use this exercise as a time to track everything you have going out and what you normally take in when you’re working. Depending on what you do, you may be able to speak with your employer about remote work or any help they may need in other areas that you can do from home as well.
Filing Unemployment
If the process of filing for unemployment seems daunting, know that this is a government resource, designed for a crisis such as this.
The US government has released a lot of the restrictions and guidelines on a state level to make qualifying for unemployment easier.
To apply, you’ll need to go to your individual state’s unemployment website. Have your basic information handy and block off a couple of hours to complete your application. There may be longer wait times than usual due to the surge in applicants.
Unemployment benefits and insurance can help float you through these difficult times. Use these benefits to make sure you and your family are secure.
The Economic Stimulus
The U.S. government has recently signed a COVID-19 stimulus bill into place to help provide relief for individuals, healthcare workers, state infrastructure, and more during this crisis.
The National Conference of State Legislatures details how the benefit money will be disbursed at a national and state level.
The important thing to note is that most Americans will receive a stimulus check based on their income and need.
The amount you’ll receive from the stimulus bill will vary based on your 2018 income tax returns. If you have filed your 2019 returns already, your 2019 income figures will be used. This money is put in place to help stimulate the economy and also provide income for those who need it.
For most Americans (the 83% whose adjusted gross income is under $75,000), you will receive a stimulus payment of $1,200 per person.
If you have dependents under 17 years of age, you’ll get an additional $500 per child.
Help Is Available When You Can’t Pay Bills
If you can’t pay bills, your mortgage, or your rent during the global COVID-19 crisis, know that there is help out there. There are resources put in place to help get everyone through this. These protective measures are designed to help those that are unable to work.
These precautions also ensure that everyone but essential workers are able to stay home. It can be overwhelming to think about not working and being able to cover your expenses. Remember that communication is key.
The most important thing you can do is to speak with your landlord and service providers to update them on your situation. Know that there are unemployment benefits as well as forbearance and grace periods available to help. For more great resources, visit the finance section here for other tips and guides.
What questions do you have about not being able to pay your bills? Ask them in the comments below.