Help with COVID-19 Debt Issues
COVID-19 has created an unprecedented debt crisis in many Canadian homes. Many people have lost their jobs or their businesses. Among those who are still employed, many have had their hours reduced or their costs increase or both. Millions of people have received government emergency benefits over the course of the pandemic, but in many cases these benefits have not been enough to pay the bills. All of this has resulted in more and more people having to take on debt to make ends meet.
Making this situation even worse for many is that a sizeable number of Canadians have little to no savings. Unfortunately, even those who had been able to follow to the advice of financial experts and put aside three or six months of expenses prior to the health crisis now find themselves having used up a large portion of their savings. Unfortunately, many of the financial issues caused by the pandemic continue and there is no clear end in sight.
However, while this is certainly a challenging situation for many, there are options available to those who need help. Here are some strategies for how to handle COVID-19 debt issues.
Talk to Your Creditors
COVID-19 is a global issue that has affected nearly every country on earth. As a response, many creditors have adjusted their policies to make it easier for people to handle their financial commitments. In some cases, financial institutions and other creditors have reached out to customers to explain the changes they’ve made. However, even if a creditor hasn’t mentioned or published any policy changes, it’s still worth contacting them if you’re having trouble paying your bills.
If you explain your situation and clearly tell them that you’re having difficulty making ends meet due to COVID-19, they may be willing to help you. In some cases, this could mean reducing or waiving interest charges, eliminating late fees, giving you more time to pay your debts, or allowing you to skip some payments.
When you talk to your creditors, explain your situation clearly and make sure you know how much you can afford to pay. This will help you recognize if what the creditor is offering will actually help you.
If you’re able to get any assistance from your creditors, make sure to get the updated plan in writing before you make any additional payments.
Look into Government Benefits
The federal government as well as several provincial and territorial governments have introduced many new benefits over the course of the pandemic. These were designed to help people cope with the financial instability caused by COVID-19. Over the last few months, the available benefits have changed considerably, and some programs that were once available have either been modified or discontinued.
If you are struggling financially, look into what the federal government or your provincial government may be offering at this time and apply for the programs you for which you qualify.
Adjust your Budget
If you set your budget prior to the COVID-19 pandemic and the fallout from this disease, it’s a good idea to review it and adjust it as necessary. There is a new financial reality in the world, and what made sense several months ago may no longer apply.
In addition to cutting spending where you can, you may want to review your financial goals as well. Times have changed and you may have new priorities now.
Look for Ways to Earn More
If you’re unable to pay your bills or you’re struggling with debt, you may want to look for ways to earn some additional income, even if it’s only in the short-term. You could consider taking on freelance or contract work, doing some overtime if you’re still employed and if your company permits it, or even selling items that you no longer need. Every little bit counts and the extra money you generate could help you handle the financial stress of the pandemic.
Get Professional Help
There are a number of places to get professional financial assistance. However, it’s important to do research before you work with any organization. Find out their qualifications, their fees, and how they can help you before you agree to anything. Some professionals, such as Licensed Insolvency Trustees, may offer a free consultation where they can look at your financial situation and provide you with details on the options that could help you. There is help out there.