Consumer credit problems are about to get much worse as many financial assistance programs come to an end. The question is, what is going to happen next?

Consumer Credit Problems Loom As Assistance Programs End

Mortgages, auto loans, and bills are all going unpaid as many Americans take advantage of postponements and deferments due to unemployment and general financial crisis. As we near the end of the strict lockdown phase, however, a number of major problems loom, not least of which is what are those who still need assistance going to do?

The deferments have pushed payments to the end of the loan life, this helps, but it doesn’t do anything for the upcoming months and it won’t be long until lenders come knocking. Delayed payments pushed off payments until the end of a given period – a period that is quickly coming to an end. This causes big problems because those delayed payments are now compounded with currently due payments. How does this happen? Because credit cards, auto loans, and installment loans have no federal guidelines governing how repayment plans are set up. So, those lenders can demand payments that aren’t feasible for clients which only causes more problems.

As if demanding repayment of postponed and current payments weren’t issue enough, there’s the fact that many of these people were unable to pay because they lost their jobs. So, now the repayment time has come and there’s no income to make those payments.

Shouldn’t unemployment help these people to meet their expenses? It could…if these people were actually getting unemployment benefits. The problem currently is that so many of those people who have applied for unemployment benefits (and believe me, there are A LOT), simply aren’t getting the benefits they have applied for. In fact, many applicants aren’t hearing anything at all, and trying to follow up on a system that is so overloaded at the moment is a fruitless endeavor.

The National Consumer Law Center is pushing for better protection on repayment of past due payments for borrowers who owe on credit cards, auto loans, and installment loans. The idea being that those loan periods would simply be extended to compensate for delayed payments rather than lenders demanding repayment along with the following month’s payment. Companies are arguing, however, that this type of extension of the loan only serves to hurt them because one way or another, they have to keep the lights on. So what’s the answer?

Lawmakers are toying with the idea of extending the expanded unemployment benefits which, in theory, would be a great idea…if those who had applied for unemployment benefits at the beginning of this pandemic were actually receiving the benefits they already applied for.

The simple fact of the matter is that the system is stretched to breaking point everywhere you look and no one has an answer that seems close to feasible. So, as all of these financial assistance programs start to wane, those individuals left unemployed will be facing much more than payments that aren’t manageable, they face evictions.

What about the moratorium? Well, just like those other aid programs, the eviction moratorium can’t continue forever…so the question remains – what now?

Consumer Credit Problems

Attorney Matt Weidner has long been standing up for the rights of Floridians facing consumer credit problems, foreclosure, and evictions. If you are staring at eviction or foreclosure and need assistance to find out where to turn next, Weidner Law is here for you. Give us a call today at 727-954-8752 and let us help you to figure out where to go from here.