The financial fallout from the COVID-19 crisis has made life precarious for many. Millions of Americans have already lost their jobs, and experts are predicting that the unemployment rate may reach 16% by July, 2020.
Meanwhile, those fortunate enough to retain employment wonder if they'll be able to keep their jobs. If you're currently unemployed or struggling to make ends meet, there's hope. Below, we highlight the assistance programs that are available to you.
1. Private Financial Institutions Offering Assistance
The United States has never battled both a health pandemic and economic downturn simultaneously. Yet, by all indications, the country will prevail. There's evidence that the COVID-19 curve has begun to flatten in some areas of the country. This has prompted some states to ease restrictions on non-essential businesses and others to make plans for reopening their economies.
Yet, for those experiencing financial uncertainty, the pressures mount. Many fear they won't be able to meet their debt obligations. Credit card companies seem to understand this, and many of them are offering various types of assistance. For example, Citigroup has a COVID-19 Assistance page listing several measures to help consumers.
If you're a customer, the only thing you need to do is submit a request to find out if you're eligible. Below, we highlight the types of assistance Citigroup is offering.
- Credit Cards: Citigroup is waiving minimum payments as well as past-due penalties for two billing periods. It's also offering a Collection forbearance program.
- Retail Banks. The financial institution is waiving monthly service fees and penalties for advanced Certificate of Deposit withdrawals until May 8, 2020. Deferral of fees for safe deposit boxes and non-Citi ATM usage began on April 3, 2020.
- Personal Loans: Citigroup will waive late payment fees and allow consumers to defer monthly payments for two billing periods.
- Small Businesses: Citigroup is also waiving early-withdrawal penalties for Certificates of Deposit, remote deposit capture fees, as well as monthly service fees.
- Student Loans: Forbearance programs for student loans are being offered through Citigroup's subservicer Firstmark.
- Mortgages: Foreclosures and evictions are suspended. A ninety-day forbearance for mortgage loans will be offered through Citigroup's subservicer Cenlar FSB. For customers who are up-to-date on their mortgage payments, Cenlar FSB will suspend negative credit reporting, as well.
According to The Balance, approximately 20 banks and credit issuers are also offering assistance programs during the coronavirus outbreak.
2. Car Insurance Companies Giving Premium Credits
Various auto insurance companies have chosen to do their part in helping consumers during the COVID-19 crisis. According to its website, State Farm will be "returning $2 billion in dividends to auto insurance customers." And, according to the "State Farm COVID-19 Update," many of its customers will receive on average a 25% credit on their policies.
Additionally, customers need not take any action to receive the credit; it will be applied automatically. Additional insurance companies offering similar assistance are listed below.
- GEICO. This insurer will credit customers 15% for their next full policy term (usually six months). For example, if someone usually pays $1,000 over a six-month period, they will be credited $150 at their next policy renewal date.
- Progressive. This insurer will provide an auto premium credit of 20% for those with an existing auto policy. If your monthly premium is $200, your credit will be $40. The credit is automatic for customers who have active auto policies in April and May, 2020. Note that the credit will be applied to any unpaid balances. Progressive is also suspending late-payment fees and staying policy cancellations (due to non-payment) through May 15, 2020.
- Liberty Mutual. Customers will receive a 15% refund on two months of their auto insurance premiums. The refund will be based on premium amounts as of April 7, 2020. If you're a customer, you won't need to call Liberty Mutual to get your refund, as it will be issued automatically.
- Travelers. Through May 15, 2020, Travelers Insurance will "suspend cancellations and nonrenewal of coverage due to nonpayment." Customers will not be charged late fees or any penalties until this date. Personal auto insurance customers in the United States will also receive a 15% credit towards their April and May premiums. As for eligible agents and brokers, Travelers is providing more than $100 million in accelerated commission payments.
3. Programs for Paying Mortgages or Rents
Mortgage payment relief for homeowners (to help avoid foreclosures) is available from various sources. States, cities, and private moneylenders are now offering their own programs apart from the federal government. The same kind of help is available for renters, as well. According to Investopedia, these are several of the programs available.
- CARES Act Eviction Protection H.R. 748 (116). The CARES Act was signed into law Mar. 27, 2020. It offers 120 days of eviction support for renters residing in housing backed by the Federal Housing Administration (FHA). Eviction notices can't be issued until July 25, 2020. Furthermore, the notice must give residents 30 days to vacate the property. Throughout the 120-day eviction cessation period, landlords are not permitted to charge fees for late rent payments. It's necessary to note that the law doesn't free renters of the obligation to pay their rent. It simply prevents landlords from evicting people during the next three months.
- Fannie Mae Disaster Response Network. For those living in a rental property financed by the Federal National Mortgage Association (more commonly known as Fannie Mae), free support from HUD-approved housing advisors is available.
- CARES Act Tenant-Based Rental Assistance. The CARES Act provides the Department of Housing and Urban Development (HUD) $17.4 billion in funding. This assistance includes funds for senior housing, rent assistance, housing vouchers, and public housing assistance.
- CARES Act Indirect Assistance. How recovery benefits should be used is not specified, so the $1,200 direct payment can be used towards rent or mortgage payments. In order to receive the entire $1,200, the adjusted gross income (AGI) must not exceed $75,000 for singles. Couples filing jointly will receive up to $2,400 if their combined income doesn't exceed $150,000. Meanwhile, couples with children aged 17 and under, will receive $500 for each child.
4. Help With Health Insurance
For those who have Marketplace health insurance coverage, the United States government will cover all pre-existing health conditions as well as any diagnosis and treatments pertaining to COVID-19.
If you don't have Marketplace coverage and would like to qualify for a Special Enrollment Period, you must meet the criteria below:
- You have lost your job-based health plan
- You have been furloughed and have lost coverage
- You have COBRA coverage but your former employer has stopped contributing funds to your account
If you're enrolled in a government Marketplace plan and your income has been reduced, you could qualify for lower premiums. You may also qualify for free or low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP).
For more information about what health insurance providers are doing to help consumers, refer to this list. Finally, if you're worried about how you'll afford care, Congress has allocated $100 billion to hospitals and the healthcare system. So, any charges you incur for care may be forgiven. We advise checking with your primary care physician or healthcare provider to find out what your options are.
5. Extensions of State Unemployment Benefits and Aid for Gig Workers
Since President Trump declared a national state of emergency on March 13, 2020, more than 22 million Americans have filed for unemployment. The Pandemic Unemployment Assistance (PUA) program helps people who don't ordinarily qualify for benefits — gig workers, freelancers, independent contractors, and the self-employed.
The National Employment Law Project (NELP) offers a fairly good summary: Unemployment Insurance Provisions in the Coronavirus Aid, Relief, and Economic Security (Cares) Act.
Also, NELP states that the CARES Act offers an additional 13 weeks of state Unemployment Insurance (UI) for employees who have exhausted all of their state UI benefits. Forty-two states offer a total of 26 weeks of UI benefits. In order for people to qualify for Pandemic Emergency Unemployment Compensation (PEUC), they must be actively searching for work.
However, states are required to be flexible in cases where a person is ill, quarantined, or their movements have been restricted.
6. The CARES Act and Families First Coronavirus Response Act (FFCRA)
The CARES Act was signed into law on March 27th, 2020. It's a $2.2 trillion economic relief package designed to protect Americans from the impact of COVID-19. The CARES Act includes:
- Assistance for American Workers and Families
- Assistance for Small Businesses
- Job Preservation for American Industries
- Assistance for State and Local Governments
Through the CARES Act, single filers may be eligible to receive up to $1,200. For households with joint filers, the stimulus payment will be $2,400.
If you have children, you'll receive $500 for each child under the age of 17. This adds up to be $3,400 for a family of four. For answers about stimulus checks, please refer to this Forbes article.
The Families First Coronavirus Response Act (FFCRA) mandates that certain employers must give their workers "paid sick leave or expanded family and medical leave" for reasons associated with COVID-19. The Department of Labor's Wage and Hour Division (WHD) will regulate and enforce the brand-new paid leave provisions.
These provisions will be effective through December 31, 2020.
If you're finding it difficult to navigate the maze of assistance programs out there, please feel free to contact us today! We're in the business of helping people just like you.
For alternative resources on tackling your credit card debt, I highly recommend Creditcards.com's article on balance transfer for credit cards. They also have some interesting statistics on how many people carry a credit card balance.