Bob Michaels is extremely passionate about providing the best possible legal experience for his clients, and focuses his practice on elder law, estate planning, business, and real estate matters. Bob has been able to provide piece of mind and a solid foundation to many folks in the Puget Sound area over the years and wants to provide resources and relevant information whenever he can. For more information on how Bob can help you and your loved ones through these troubling times, contact Bob to schedule a FREE consultation.
The current public health crisis is causing financial distress for many as they struggle with a sudden reduction in income, in addition to uncertainty about how long this situation will last. Even during this uncertain time, financial obligations continue. Therefore, it is of the utmost importance to prioritize your expenses. Here are some important expenses to consider:
Housing Expenses – First Priority
Whether you pay rent or a mortgage, no legal action can be taken against you to evict you or foreclose on your home during this emergency. However, these bills are still owed. Even if your landlord or mortgage lender cannot take any action to begin a foreclosure action or eviction right now, when the courts reopen, they can begin legal proceedings. At that point, you will have to make up the payments you missed.
Housing should be considered your highest priority expense. If possible, you should continue paying your rent or mortgage every month. If you are unable to continue to pay your housing expenses, you should speak to your lender about negotiating an alternative arrangement that will allow you to pay less until you can catch up.
Utility Expenses – Second Priority
Currently, your utilities (electricity, gas, and water) cannot be shut off due to nonpayment. Many utility providers will negotiate a deferred payment plan.
While utility payments are a priority, you should reach out to your provider to see if you can negotiate a lower monthly payment or a level billing plan.
However, if you have an outstanding balance that remains unpaid when the ban is lifted, you may be subject to a utility shutoff at that point.
Student Loans – Third Priority
If you have a Direct Loan or a Federal Family Education Loan (FFEL) loan that is held by the Department of Education, all payments are suspended until September 30, 2020. (This does not apply to other types of federal loans including Perkins Loans, and FFEL loans held by commercial lenders.) While payments are suspended, no interest will accrue. Also, the period of time during which payments are suspended will count toward Public Service Loan Forgiveness.
All collection of student loans, including wage garnishment and tax refund offsets, are also suspended during this time.
This means that student loan payments are NOT considered a priority at this time.
More information about relief available to student loan borrowers is available HERE.
Credit Cards – Fourth Priority
Credit Cards are unsecured debts, which means they should be considered your lowest priority expense. Credit cards and other unsecured debts are limited in the steps they can take to collect from you.
Reach out to your lender; many banks may be willing to defer payments or waive late fees or penalties. However, if you still cannot pay, credit card lenders cannot cut off essential services or seize any of your funds without first taking you to court.
We hope these tips can help you or your loved ones through these challenging times. At Tacoma Elder Care, your safety and security are one of our biggest priorities.
As part of our commitment to helping you, we want to share important information you may find interesting or relevant.
Bob Michaels is available for consultations in by phone, virtually, or in person. Please contact Bob HERE to request a meeting.