Spending

April bills are due — here's how to navigate them if the coronavirus outbreak has disrupted your income

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It's the beginning of a new month, meaning a new round of bills is coming due — maybe the first you've had to contend with since the coronavirus outbreak picked up in mid-March. If you're among those who have lost your job or otherwise had your income disrupted as a result of the spread of the virus, juggling those financial obligations may not be easy. 

"It's a very challenging and difficult situation," says Jedidiah Collins, a certified financial planner who runs the firm Rookie to Veteran in the Seattle area. "You'll need to prioritize" your financial decisions, he says.

Fortunately, many consumers have some protections and repayment leeway, from federal and state governments, as well as individual companies and financial institutions. The recent $2.2 trillion stimulus package allows those with federal student loans to defer their payments for six months, for example, and in some cities, like New York, an eviction freeze means that renters can't be removed from their homes if they can't afford rent.

While you can try to take matters into your own hands by reaching out to your landlord or loan provider, many others are likely doing the same, making it difficult to get through. Before you spend hours on the phone, check to see what protections may already be in place so you know what to ask for.

Here is a quick rundown.

Rent and mortgage payments

Washington, D.C., and 28 states have announced eviction freezes, or moratoriums, to protect renters. So, depending on where you live, you may not need to worry about getting evicted over the next couple of months if you can't afford to pay rent — but that may not mean that you're off the hook for any rent you owe.

If you own, the protections you have will depend on the type of mortgage you have, and the lender. Borrowers with HUD loans, or mortgages through Fannie Mae and Freddie Mac, qualify for foreclosure moratoriums, as well as forbearance options. But you'll need to contact your loan servicer to let them know if you anticipate having trouble paying as soon as possible.

If you got your mortgage through a private lender, your best option is to get in touch with them and see what you can work out. Lenders including Bank of America and Ally Bank have announced they are offering eligible borrowers deferments, for example, so you may be able to buy yourself some time by contacting them. 

"If you have a cash flow interruption because of your employment and you need to defer your payments for 30, 60, 90 days, call us up," Bank of America CEO Brian Moynihan recently told CNBC. The bank is working with borrowers on a case-by-case basis, offering varying kinds of aid.

Credit card bills

Most major banks are allowing borrowers to defer their credit card payments for the time being, and many are also refunding certain fees and altering minimum payment requirements. Consumers need to call and ask to be enrolled, according to Matt Schulz, chief industry analyst at LendingTree.

Insurance premiums

Generally, if you don't pay the monthly premium on your auto, health or other coverage, your insurance company will cancel your policy. But as a result of the pandemic, insurers including Geico and Progressive have announced they are pausing cancellations and offering payment assistance to policyholders who are struggling to keep up their responsibilities.

If you're not going to be able to make a payment, call your insurance agent to ask about hardship assistance. 

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Student loans

Federal student loan holders don't need to make any payments until October 1 of this year, thanks to protections passed in the latest stimulus package. Loan rates are also temporarily set to 0%

If you have private loans, though, you should get in contact with their lenders to see what kind of assistance the lenders can offer. The six-month deferment doesn't apply to private loans, so your payment will most likely be due as scheduled. But many private lenders are announcing postponement and financial hardship programs, including Navient and Wells Fargo.

Car payments

The auto industry is also feeling the crunch, and as a result, is offering car buyers and owners lower interest rates and deferment options on auto loans. Those who are just now looking at buying or leasing a new car can take advantage of incentives like deferred payments of up to 120 days, which is currently being offered by General Motors.

But if you already own a car and are simply trying to relieve some of the pressure from the payments, most major auto brands, like Ford, Toyota, and Nissan, are offering payment deferrals, waiving late fees, and otherwise inviting customers to contact them to discuss their options.

If you financed your car through a bank, similar relief programs may be available.

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Ideas to free up some space in your budget

Even if you're able to defer your payments, you still might feel pressed. Take a look at your bank statements and budget and see if there are some other recurring payments that you can possibly cut, cancel, or defer.

For instance, if you go to a gym, you're likely not going to be able to use your membership as long as social distancing and quarantine protocols are in place. It might be worth it to call the gym and cancel or pause your membership for the time being. The same goes for other recurring monthly expenses you aren't using, like monthly bus passes.

The key for consumers, especially during times like this, is to be proactive. Everyone, businesses included, are going to feel the effects of the coronavirus outbreak, which means lenders will likely have more leniency. Experts say taking some steps now to get your spending on track and touch base with your lenders could also pay dividends later on.

"When the world starts to open back up," says Collins, you'll hopefully be able to see your full financial picture with a "clearer lens."

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