MANAGING YOUR DEBT IN A COVID 19 WORLD: DO I GET A PIECE OF THE STIMULUS?
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On March 27, Congress passed the big relief legislation with it’s $2, 000,000,000,000 (yep, 12 zeros) price tag. It is called the CARES ACT (Coronvirus Aid, Relief and Economic Security Act) Are you sure you are getting a piece of that?
Let’s say you make less than 75,000 so you think you qualify for the stimulus check. Good for you. But what if you were making 75000 a year….and now you don’t? What if you just lost your job? Can you get your share?
Maybe. Maybe not. You can read CARES until the cows come home, but you are not going to know if you can get a check if you are one of those people who just lost a great job.
The stimulus ‘package’ is silent on that issue. It simply says you get funds if your “income” is less than 75K…per year? …in the past year ? … in the coming year? Not a word to explain that. There is nothing in the law that says “You made good money up to now but now you are in trouble…you can join the party”. The IRS seems relegated to the responsibility to decide who shall receive and who shall not. If you think you are entitled, and no check is showing up, you will have to interact with the IRS. If history is any example, finding relief through communication to the IRS will not be for the weak of heart.
That being said, the CARES act allows for extended and simplified access to unemployment benefits.
If you are going to have problems paying your mortgage, you can now ask your lender for relief and they MUST give you as long as a year to NOT pay….as long as your loan is a FNMA/FHLMC insured loan (most are). You will not have to pay any fees or penalties during the forbearance period.
And if you have a student loan, you will now get a 6 month payment waiver, as long as you have a federally insured loan (most are). If you are already in collections, your student lender has to stop garnishing your wages. If you are in a position to have your employer pay on your loan (even if you are self employed), the money you get for your loan will not be taxable.
You can take money out of your IRA early without penalty, and you can pay it back up to three years (it used to be 90 days).
Lenders and creditors are not supposed to negatively report your credit issues until after the national emergency is declared over….but your cable company and utility can still cut off your service if you don’t pay.
CARES expands the Economic Injury Disaster Loan Program….if you qualify for any disaster loan, the SBA has to give you at least $10,000 within 3 days. And there are billions of dollars available…but it is first come- first serve and the application process starts on Friday April 3, a process likely to resemble getting tickets to a Taylor Swift concert.
In my next post, I will discuss how the CARES ACT renders more people eligible to file bankruptcy.
For today, stay safe and lay low.
March 31, 2020