The Best Things To Say If You Can't Pay Your Bills

2020 has been no ordinary year - especially for the 38 million Americans who are out of work as a result of the COVID crisis. Whether you’ve lost your job, had your hours cut back, or are simply struggling to repay all your debts, you’ll need to say the right things to your creditors if your next payment is going to be late. 

Let’s take a look at some common credit types and how to word your communications with lenders for the best outcome. 

When It Comes To Credit Cards       

Late card payments can result in a higher APR, late payment fees, and a drop in your FICO score - but fortunately relief is at hand. 

• Most credit card companies now offer some form of hardship program for borrowers who find themselves in financial trouble due to the coronavirus pandemic
• You’ll want to contact your card issuer or visit their website to learn more about the relief measures they have in place
• When asking for a payment deferral or reduction the word you’ll need to know is ‘accommodation’. 

How to word your request: “I lost my job due to the COVID-19 pandemic and won’t be able to make my full payment this month. Could you offer me a coronavirus accommodation to ease my financial burden?”

When It Comes To Car Payments    

Car financing is a form of secured lending and that means your vehicle can be repossessed if you miss a payment. In some states, car financing companies have been known to take action to repossess vehicles as soon as the next day after a late payment - so you’ll want to contact them ahead of time. 

• Reach out to your vehicle finance company as soon as it becomes clear that you may not be able to make your payment
• You may be able to negotiate a deferred payment or change your repayment schedule given the extraordinary circumstances brought about by COVID-19
• Any new agreements you reach with your lender should be sent to you in writing so that you have proof of them for future reference

What to say: ‘I am currently  unemployed as a result of the coronavirus pandemic and may not be able to make my car payment this month. What kind of financial relief can you offer me over the next three months?’

When It Comes To Mortgages          

Your home is probably your most valuable asset - and you don’t want to risk losing it due to missed payments. Fortunately, if you have a federal-backed mortgage you may qualify for a forbearance package. 

• Your first step will be contacting your mortgage provider and asking them exactly what kind of financial assistance is available to you
•  ‘Forbearance’ is the word to remember here because it’s the best  type of assistance. You’ll need to prove that your financial difficulties are a direct result of COVID-19. Your mortgage company or bank will probably ask you a series of questions about your current financial circumstances when they assess your application

When It Comes To Student Loans   

This type of debt is the easiest to deal with since the federal government has automatically suspended loan payments until the end of September. However, this only applies to federal student loans and not private loans. 

• If you have a private student loan, you may still qualify for a 90-day forbearance or payment deferral scheme. You’ll want to contact your loan issuer and find out what support they’re offering at this time
• Even in the worst case scenario where you miss a payment and interest accrues on your loan, it probably won’t cost you that much due to the low APRs on most student debt. Nonetheless, it’s always better to contact your lender ahead of time and negotiate a solution

When It Comes To Rent      

Many cities across the US have implemented eviction moratoriums in the wake of COVID-19, but it’s always better to contact your landlord promptly and politely to negotiate a payment plan that works for both of you. 

• Don’t hesitate to get in touch with your rented apartment or home’s owner if you feel you won’t be able to pay the rent this month
• The sooner you do the more prior warning they’ll have - and this will help them plan their own finances too. Remember to put all correspondence with them in writing for future reference. 

What to say to your landlord: ‘I have lost my job due to the COVID-19 pandemic and am having some financial challenges. Would you be willing to accept $XXX this month instead of the usual rental amount?’

Conclusion

The current economic climate and healthcare challenges facing the world are having a serious effect on household finances across America - but there are ways to find help. 

Whether you’re concerned about your rent, car, mortgage, or credit card payment, you’ll stand a better chance of finding financial relief by following the tips outlined above.