- What you should do if your credit is perfect (or near perfect) but you foresee a temporary drop or loss of income
- What if your credit is not perfect and you are worried about your mortgage, car payments, and credit card debt?
- Whether In-Person, Over the Phone or By Video, Bond and Botes Is Here to Help
Bond & Botes and our team of lawyers have helped people across Alabama, Mississippi, and Tennessee take care of their financial concerns for over 30 years. Over recent days, as federal and local governments began responding to the recent coronavirus outbreak, we knew right away that there would be tough financial times ahead for people across the nation. Some are already facing unexpected layoffs, and others are trying to figure out how they will manage childcare if their current care closes down in response to the virus.
We are inundated daily, really hourly, with the very frightening medical aspects of the Coronavirus. On top of that, the stock market is tumbling and people are frightened, not only regarding their own health and that of their family members, but there is also concern about job loss and a nationwide business slow down which may impact a family’s income both in the near and long term. This seems to especially be the case with people who work in the travel, leisure and hospitality fields since we are being told to socially isolate and not travel until this pandemic passes.
While people have concerns about their own health, we are seeing a lot of prospective clients that have nagging concerns about their income stability and the need to stay current on their financial obligations. These concerns are especially pressing if a loss or drop of income is seen coming on the horizon.
If you have any concerns along these lines, here is some general guidance to try and help alleviate your worries, depending on your own particular circumstances.
What you should do if your credit is perfect (or near perfect) but you foresee a temporary drop or loss of income
First of all, let’s define perfect credit. Generally speaking, perfect credit is that you have not been 30 days late on any financial obligation and you have paid ALL of your bills exactly on time over the past two years. Assuming that is the case, you will want to try and do everything you can to preserve your pristine credit. In order to do so, horde your cash. Only pay the minimum payments on ALL of your debts on-time and don’t pay anything ahead or down until this storm has passed. If you do fall behind now, irrespective of the reason, your credit will take a hit. Again, in order to preserve your perfect credit, you must stay absolutely current on all of your debts!
What if your credit is not perfect and you are worried about your mortgage, car payments, and credit card debt?
If you are falling behind on your bills or are already behind, then prioritize your debts. Make sure you pay your house and/or rent payment and your vehicle payment. These are secured creditors and those items can be lost by foreclosure or repossession if you don’t pay them. Pay those first and then prioritize from there. It is very important to try and stay as current as you can on your home or apartment and your vehicles. If you find you can’t stay exactly current on these obligations, then we encourage you to write a letter to your mortgage company, landlord and vehicle lienholders explaining exactly and in detail what the situation is and what your plan is to get them caught up and current in the future. If you want to do this perfectly, make sure you submit a detailed letter to them by certified mail, return receipt. I would do this each and every month while you are going through this financial set back. Make sure the plan that you lay out is one that you can absolutely keep and make work as exactly as you have proposed. Keep a copy of EVERYTHING that you send to your creditors and everything you receive from them. Then, if you receive a phone call from your creditors, you can reply to them with everything that is in your letter and try to stay to that script. The key point here is to do this IN WRITING!
After you have your housing and vehicle debts addressed, then move to your other creditors. Make sure you pay your primary doctor and dentist first so that you have immediate medical care available to you. Then take the rest of your creditors, including the rest of any medical debts you have, signature loans, credit cards, etc. and figure out your plan from there. Make sure to WRITE each creditor as previously described and explain your situation and plan for payment for each one. Again, and to reiterate, if you don’t pay all of your financial obligations on-time each and every month, then your credit will be impacted. Creditors and debt collectors, unfortunately, don’t have to work with you, even in this time of global crisis. We just wanted to provide this general information to try and reduce fear and worry since there is so much of that out there anyway.
Whether In-Person, Over the Phone or By Video, Bond and Botes Is Here to Help
We are here and available to you if you need to talk to someone. We can consult with you in-person, over the phone or by video, whatever you prefer. You can always schedule a free consultation with us at any time to discuss your own unique situation. This is an unfortunate and frightening time for everyone. We’re all in this together. Everyone has the same fears and worries. We also have a lot of information at our blog post for you to look at. Just type in your question at our search bar and we should have a post that, in all likelihood, will address your concerns. We also have a book available for sale at Amazon. During this Coronavirus crisis, however, if you would like a free e-copy of our book to do some detailed research, send us an email to firstname.lastname@example.org and put “Bond and Botes Bankruptcy Book” in the subject line. We’ll then email a free e-copy of our book to you. If you don’t get it from us within 24 hours, please email us again as it may have been caught up in our spam filter. Please take care of yourself and your family members during this crisis.
Ron Sykstus is a Managing Partner of several of the Bond & Botes Law Offices throughout Alabama. He holds a Bachelor of Science from the University of Arizona, Tucson, and a Juris Doctorate from the Northern Illinois University College of Law. Ron has served in numerous positions throughout the U.S. Army and now utilizes his expertise in the areas of VA issues, security clearances, military law, and bankruptcy to assist his clients when they need it most. Read his full bio here.