With the COVID-19 virus pandemic sweeping the United States, many businesses and consumers have suffered a blow to their financial security. When debts pile up faster than the debtor can pay them, bankruptcy may seem the only option. However, there are ways to avoid bankruptcy and manage debt relief efforts.
Paying Off Debt During The Coronavirus Pandemic
A recent study found that 30 percent of Americans had increased credit card debt during the coronavirus pandemic. Priority Plus Financial states that the biggest contributors to debt were inflation and income loss. Parents with children under 18 years old were particularly vulnerable to debt during the epidemic and even expanded child tax credits could not completely mitigate this issue. As a result, many consumers struggled to pay their bills on time, with more than a quarter reporting late payments.
The priority for people facing a financial setback should be paying off their credit cards. However, even if you have paid off your balances, you may still be worried about making your monthly payments. In this situation, you should consider contacting your creditors and requesting a reduction in your interest rates.
The good news is that the U.S. labor market is beginning to recover. As a result, Americans feel better about their finances than they were early in the coronavirus pandemic. However, nearly half of non-retired adults say the effects of the pandemic will make it harder for them to reach their long-term financial goals.
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Managing Debt Relief During The Coronavirus Pandemic
Managing debt relief during the coronaviral outbreak can be challenging, but you don’t have to lose hope. You can contact your lender to see if you qualify for hardship programs. You can also contact the Small Business Administration for additional help. This agency can help you get a deferred payment plan and other coronavirus relief.
The COVID-19 pandemic has put many people and businesses at risk, and it is important to know how to avoid bankruptcy if you have a lot of debt. The government has taken steps to ease the burden on consumers, and it’s important to know the best way to get the relief you need.
Debt managers should monitor the situation and update their websites with relevant information. In addition, there may be new responsibilities to take on, such as offering guarantees. In these cases, debt managers should engage with the government early to ensure a smooth transition. The government should also keep in touch with credit rating agencies regularly.