COVID-19 and Bankruptcy – Information for People Who Struggle to Pay Their Mortgage

Paying mortgage during the COVID-19 Crisis is a Struggle

Bankruptcy Robert M. Geller discusses what you can do in cases of financial hardship for people who struggle to pay their mortgage during the COVID-19 pandemic.

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COVID-19 Bankruptcy Information for people struggling to pay their mortgage video transcript:

There are 23 million Americans who are now unemployed. That’s three percentage points away from reaching the unemployment levels of the great depression. Here’s some information and things you can do to help you through this difficult financial time:

First of all, you should have you received your stimulus money. If you have not received it, you can go to irs.gov, log in, and request payment or information about your payment that way. Every adult American who filed a tax return, receives social security, receives veterans’ benefits, etc. should be receiving stimulus money unless your income exceeded $75,000, so make sure you get your stimulus money.

Next thing is that under the Cares Act, there are mortgage forbearance provisions. If you have a mortgage that is federally backed – which you can check online – you are entitled to seeking a forbearance of your mortgage.

What is it? Forbearance. That is where you can skip mortgage payments up to six payments. Most mortgage companies are offering two months right now. So contact your mortgage company and request a mortgage forbearance. But be careful with requesting it because what the Cares Act doesn’t provide is how you will pay those skipped payments back.

I’ve already seen from my clients the mortgage company is telling them that at the end of their forbearance, whether it is two months, four months, or six months, they’re going to have to pay that money back in a lump sum. So you’re going to have to potentially come up with your six months of mortgage payments at the end of your six month forbearance. So be very careful with that. Make sure you understand what it is you’re getting yourself into and make sure whatever you do, you get it.

We had a similar situation in in 2008 and 2009 with the mortgage crisis. Mortgage companies were telling people not to pay their mortgages and go into default and then seek a hardship or a mortgage modification. The problem with that is that when people sought these mortgage modifications, the mortgage companies ran them around in circles and made them jump through hoops and made their life very difficult. And then those poor people found out their mortgage modifications were in default. So be very careful with your mortgage companies and understand what you’re doing.

A couple of other things that you can do is you can contact your insurance company, your automobile insurance company, and ask for a reduction in your rates. Many insurance companies are doing this voluntarily and that’s because we’re just not driving that much. So because we’re not driving that much, our rates should be lower.

Another thing you can do is contact your credit card companies. Under the Cares Act, you should be entitled to skip some payments on your credit card bills and of course you’re going to have to pay the money back. Also, the credit card companies are not allowed to report that negatively on your credit report.

Additionally, renters can skip rent payments in some cases. Many landlords or large apartment complexes have mortgages that are federally backed. They are also required to give you some type of concession on your rent or allow you to skip some rent. There are some moratoriums in place until the middle of May. There are also no evictions from foreclosures allowed. That’s an order of the state or the governor of the state of Florida. So that’s more information about what you can do.

Those are the suggestions I have for you today. My name is attorney Robert Geller. I am a consumer bankruptcy attorney. I’ve been helping people deal with their financial hardships for over 30 years. If you need any information or have any questions about what you can do, you can use these suggestions. If this isn’t enough, reach out to us with any other questions. You can call us at (813) 405-1509 and we will be glad to answer your questions. Or you can message us on Facebook. Thank you. And finally, I hope that you and your family remain healthy through this very scary and difficult time.