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Brace yourself for stress as slew of debts could come due

Brace yourself for stress as slew of debts come due
Posted at 8:09 PM, Jul 15, 2020
and last updated 2020-07-15 21:10:51-04

It will be a wakeup call for many as moratoriums on foreclosures and some debt collection come to an end.

Experts describe how to manage and survive what's coming next month.

The next few weeks mark the beginning of serious financial uncertainty for millions of people. A slew of debt -- from income tax payments to several months of rent- are going to be due at the same time.

“It is going to be a perfect storm of financial difficulty for many many people,” said Andrea Bopp Stark, an attorney at the National Consumer Law Center.

She is trying to help people prepare and has three steps anyone can take.

Step 1: Sit down and create a list of top priority bills and debt to pay.

"People are going to be barraged with debt collectors calling and trying to get them to pay on a medical debt or a credit card debt, but those debts are less important."

“Pay debts that if you didn't pay them it would cause immediate harm to your family. So those are things like your rent and a car payment, especially if you need your car to go to work. If you have a judgement against you, a court judgement against you for a debt it is important to try and make a payment plan to pay that because creditor could issue a garnishment against your wages."

Step 2: Contact your lender to make a payment plan on those priority debts.

"We are seeing data come in that there are people who are delinquent and don't have a forbearance agreement, when they could very easily be in a forbearance agreement. I know wait times on the phone are horrible right now, but you have to be persistent.”

Step 3: Find a way to stick to your list.

"It may sound obvious but if you have it on paper you have created a budget,” she said. “Stick that to the refrigerator or wherever. Then you know these are the priority spending items and if your son or daughter say 'Oh I want this or that,’ 'no look at the fridge these are our priority spending items sorry."

Because every situation may not be as easy as 1,2,3, the NCLC has now made its in-depth guide to "surviving debt."

It’s free atnclc.org.

It has letters to send to debt collectors and hundreds of pages of help to get you through this tough time.