If you are like many Americans, you are looking to get coronavirus financial relief, likely due to a job loss, or loss of income that has resulted due to forced business closures across the United States due to the Coronavirus. It’s hard to comprehend as just a few weeks ago the U.S. unemployment rate was very low and our financial markets were at all time highs. With that said, it was inevitable that the bull market would come to an end at some point, but few could have predicted that the Coronavirus would have been the cause. Just a few months ago we talked about how to prepare for the next recession and now we are here. Below are a few resources, options and tips available to Americans to help get coronavirus financial relief and stabilize your financial situation. I also discussed how to get coronavirus financial relief on the New Urban Unlimited Radio show on 1150am KKNW and you can listen to the segment about how to get financial relief here:
I Can’t Pay My Mortgage Due to the Coronavirus, What Can I Do?
While laws are quickly developing to assist those who cannot pay their mortgage payments due to the Coronavirus, some announcements have been made to help homeowners. Federal regulators, through Fannie Mae and Freddie Mac, are ordering lenders to offer homeowners flexibility and the entire mortgage industry may soon follow suite. Under the plan, people who have suffered a loss of income can qualify to make reduced payments or be granted complete pause in payments up to 12 months.
This mortgage relief is not automatic and borrowers should contact their mortgage services to request assistance. Homeowners should keep in mind that this is not a forgiveness program or free money, but will likely work like a loan modification extending the terms of the loan. Another option for homeowners if your lender does not offer such programs is filing a chapter 13 bankruptcy to make up arrears over 5 years once your income stabilizes. There is also the Washington state foreclosure fairness mediation program which can help homeowners obtain a loan modification while delaying pending foreclosure sales.
If you are a renter, many states and cities have halted evictions as the nation recovers from this crisis.
How Can I get Income Now Due to Coronavirus Job Loss?
- Apply for unemployment. Many waiting periods are being waived.
- Federal government may issue payments of up to $1,200 per person +500 per child.
- Apply for assistance through employers, unions or professional organizations.
I own a Small Business and Need Financial Relief, How Do I get Assistance?
The United States governments answer to this so far has been to have small business owners apply for the economic injury disaster loan program, where the federal government is offering low interest loans to business owners so that they can keep their businesses afloat during the coronavirus lockdown. Also once business are again able to operate as usual, businesses may choose to restructure their debts through a chapter 11 bankruptcy, however this may only make sense once the business is generating income again to make payments to creditors.
Some business owners may simply choose to close their doors and not wish to continue operating their business. In this case a business can simply notify landlords and creditors and walk away, however the key will be whether the business owner has personally guaranteed debts associated with the business. While a business may file for chapter 7 bankruptcy, it cannot receive a discharge of its debts, although the business may be able to save owners from certain Washington State tax liabilities if the business files chapter 7 bankruptcy through state law.
If the business owner is personally liable for debts, they may want to consider filing a personal chapter 7 or chapter 13 bankruptcy in order to gain relief from these debts, while also closing down the business.
Do I Need to Pay My Student Loans Due to a Coronavirus Job Loss?
The United States government has announced that they will be suspending student loan payments and waiving interest during the Coronavirus national emergency. All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days and borrowers have the option to suspend payments for an additional two months. Borrowers should contact their lender to learn about all options available to them as other options could be income-based repayment options moving forward.
What if I Have an Extended Loss of Income?
If you have or will incur significant unsecured debt such as credit cards or personal loans as a result of the Coronavirus and you don’t know how you are going to pay the debt back you should keep in mind that bankruptcy options may be available to you to eliminate crushing unsecured debts. While the laws appear to be changing at a rapid pace, under the current laws you can protect qualified retirement accounts when you file for bankruptcy.
Therefore, if you would otherwise qualify for bankruptcy and are not at risk of losing assets such as a home as part of your bankruptcy filing, then it is not advisable to dip into retirement savings prior to filing bankruptcy. Many individuals and families end up liquidating retirement accounts and then find themselves needing to file bankruptcy anyways. Therefore, it is a good idea to learn about your options and plan out your financial recovery strategy prior to dipping into savings.
If you live in Washington State and are looking for guidance regarding coronavirus financial relief, give Symmes Law Group a call at 206-682-7975 or contact us to get the counsel you need.