Where Does Debt Relief Stand In the Ongoing COVID-19 Crisis?

Jun 15, 2021 | Debt Collection, Debt Relief

The COVID-19 pandemic resulted in the country’s unemployment rate to rise to 14.7% in April last year. It dropped to 6% by June 2021, but this figure still remains noticeably higher than the pre-pandemic 3.5%. Fortunately, federal and state governments as well as various businesses continue to provide financial relief to the American population at large.

If you’re wondering whether you can find debt relief at this stage of the COVID-19 crisis, know that help is still within reach to deal with different types of situations.

Relief for Homeowners

If you’re having trouble in keeping up with your mortgage payments, you may consider going the forbearance way. You don’t need to provide additional documentation to qualify – you simply need to information your mortgage provider that you are facing financial hardship because of the pandemic. In most cases, you don’t have to worry about paying additional interest, fees, or penalties.

If you have a Freddie Mac- or Fannie Mae-backed loan, there is no existing deadline to request for forbearance. For loans backed by VA, USDA, or HUD/FHA, the current deadline for requesting forbearance is September 30th, 2021.

Relief for Renters

The Centers for Disease Control and Prevention (CDC) put a stop on most evictions. This can help you stay put in your existing rental home. Federal, state, and local bodies are providing assistance in avoiding eviction and meeting housing expenses. You might also avoid eviction if your landlord is currently on mortgage forbearance.

Credit Card Debt and Other Types of Personal Credit

During the first few months of the pandemic, a number of banks and financial institutions across the U.S. continue provided relief measures for impacted customers in the form of lower interest rates, lower monthly repayments, and late fee waivers. However, much of this assistance seems to be dwindling now. The best way to find out if you might get any help is to call your creditors over the phone or check their websites.

Relief for Students

As of now, COVID-19 Emergency Relief Flexibilities on federal student loan interest and collection on all defaulted loans that fall under the Federal Family Education Loan (FFEL) Program are set to remain in place until September 30, 2021. Whether or not students might benefit by an extension is anybody’s guess at this time. If you’ve taken a private student loan, determine if you might benefit by getting legal advice.

Relief From the Federal Government

The federal government has given states the liberty to amend laws so they may provide benefits to individuals whose employment has been affected because of the COVID-19 crisis. The American Rescue Plan Act of 2021 has temporarily authorized the following when it comes to unemployment benefits:

  • Extensions for individuals who have been receiving unemployment benefits
  • Anyone who qualifies for employment benefits will receive an additional $300 per week automatically
  • Gig workers and self-employed individuals will receive an extension under the Pandemic Unemployment Assistance (PUA) program

Stimulus Checks
The last stimulus check of $1,400 for individual tax filers came in March 2021. While there is talk of a fourth, there is no telling if and when it might come.

Child Tax Credit
The Child Tax Credit (CTC) comes in the form of six payments transferred directly into bank account of eligible parents. While it is not necessary for you to have filed your taxes, you need to meet minimum income limits. If you qualify, you will receive $250 per month for every child aged between 6 to not-yet 18 years, and $300 per month for every child under 6 years of age. The payments are to come through every month from July to December.

Conclusion

With help coming from different quarters, being able to distinguish the genuine from scamsters is important –so much so that the Federal Trade Commission (FTC) has issued a scammers alert. If you’ve already sought debt relief – be it through mortgage forbearance or lowered credit card payments – and are still unable to manage your finances, consider getting in touch with a debt relief attorney. This way, you may prepare for what the future might hold in a better manner.

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