Pandemic Hit You Hard Financially? Here’s What You Can Do

Everyone has been affected by the COVID-19 pandemic in one way or another. Some people have taken ill, others are forced into self-isolation, and pretty much everyone has been under government-mandated lockdowns for weeks and even months on end.

International travel has been suspended in almost all countries, businesses have been abruptly shut down, and millions of employees and workers have been laid off. In the USA alone, over 36 million people have made unemployment claims. Despite the attempt to slowly reopen various facilities in many cities and states, unemployment claims are still on the rise.

 

Seeing that this pandemic has wreaked havoc on our lives, it’s safe to assume that COVID-19 is a killer virus in more ways than one. If you are lucky enough health-wise and didn’t catch the virus, you might not be so lucky financially and your bank account may take a hard hit. Like your physical health, your financial health could also be affected by the virus, leaving you now to try and recover. Here are a few things you can do in the meantime to make ends meet and stay afloat during this trying period.

Make Use of Hardship Concessions

There is little doubt that most people have some sort of loan taken out, whether it’s a personal loan, student, mortgage, bank, or any other type of loan. During this pandemic, you need to contact your creditor if you are having a hard time paying back the loan. When facing economic hardship, creditors can make concessions for you to help. 

 

For instance, since interest is still part of your loan, a concession might allow you to only pay back the interest for the time being and not the principal loan itself. Also, lenders might have hardship plans in place. These plans could offer lower interest rates, fees, and penalties on late payments. Besides the lenders, these concessions might also be provided by utility companies if you’re having trouble paying for your water, gas, or electric bills. This will help you for a limited period of time, so it’s advised to talk to those in charge and see what your options are.

Use Assisted Community and Government Programs

You might have already seen people lining up in community food banks. Even in dire times, people still have needs that they need to fulfill to survive, and it’s not unusual to seek help from the community around you, even if you’ve never had to do that before. 

 

The local state governments do a lot to help their segment of the population, so it’s a matter of finding out where to go to find help. This is where social media can come in handy as, through it, you can find out what kinds of programs are open and how they can help you. Keep abreast of what is happening in your community and the available help offered.

File for Bankruptcy

Filing for bankruptcy isn’t as bad as it sounds. It can relieve you from various debts you would otherwise have to pay. In bankruptcy, there are non-dischargeable debts that you cannot be cleared from like alimony, child support, or student loans, for instance. But there are also dischargeable debts like personal loans. Filing for bankruptcy relief can help clear off most of the debts that make you liable while allowing you to reorganize your finances to pay off other debts that you cannot avoid. A bankruptcy claim can also stop a foreclosure on your home from happening.

 

This is now a path many choose to take. Unfortunately, there are plenty of people out there who have lost everything because of Covid-19, particularly those who work in vacation spots that depend on tourism and travel to prosper such as San Diego and Las Vegas. Those people need to file for bankruptcy to avoid any more losses. It’s normal to have a lot of apprehension and questions about claiming bankruptcy, which is why you would do best with a bankruptcy attorney with you every step of the way. Claiming bankruptcy is a serious, legal step, and you don’t want to go at it alone as you probably will not understand the implications of it without a trusted lawyer by your side.

Use Low-Interest Credit Cards

In times of financial hardship, every penny counts. Concerning your credit cards, use the ones that charge the lowest interest rates. A few points lower in interest will make a difference when it’s time to pay your credit bills. Of course, it’s a given that this isn’t the time for random shopping sprees; which leads us to our next point.

Buy Only What You Need

Global economies have already gone into recession and the worst is not yet over. Everyone is advised to tighten their belt. This means cutting back on any expenses that are considered non-essential. You can reallocate your spending by putting money in an emergency fund that would have otherwise been spent on random items. Clearly define what is essential and what is not essential for you and your family, and create a strict budget accordingly. This is easier than you might think and is a must-do during this pandemic. 

Create Another Source of Income

Surely, you have knowledge and skills that you can make use of and create another source of income for yourself. Even if finding another source of income right now isn’t possible, it is a step to consider for the future if you only have one source of income to rely on. This is because even when the dust settles, we won’t go back to doing things the same way we used to. Things changed, and this requires us to change as well to keep up with circumstances. You want to future-proof your finances by finding an alternative source of income. 

 

We’ve all taken a pounding during this COVID-19 outbreak. Even if we are lucky enough to not have contracted the virus, it still affects our livelihood and our finances, and we have to think wisely and do the right things to get back on our feet. Asking for concessions, filing for bankruptcy, limiting spending, and finding other sources of income are some of the most effective ways to protect your finances now and in the future.