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If You Can’t Pay Your Bills due to the Virus

| Opinion | May 14, 2020

by Ray J. Bulaon, attorney

As we face an unprecedented global pandemic that has forced the government to order an immediate lockdown of almost all businesses, millions of people are suddenly without a paycheck.

Fear can be our worst enemy at this time because it can be debilitating. So, it is important that you take care of your mental health as you plan and strategize for tougher days ahead. How do you pay your bills when there’s no money coming in? Who do you pay first? What will happen if you don’t pay your bills and what can creditors do?

First of all, understand that this situation is new to everyone including all your creditors. So even banks and lenders were caught unprepared and don’t have an instant answer as to how they will respond to millions of people who are expected to default on their mortgages, cars, credit card and loan payments, etc.  This is still a very fluid situation, and no one has a definitive answer.

From what I’ve seen so far, remedies under consideration or are already being implemented include bans on evictions, foreclosures and utility shutoffs. I’m sure you already know, the government is also sending everyone a check although I know that this will barely make a dent on bills that are already mounting.

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The best advice I can give at this time is to prioritize your spending while taking care of your health and safety FIRST. Without your health, nothing really matters and that should be at the very top of your priority list.

Remember that this crisis is keeping everyone from doing their jobs, including the bill collectors who may still be calling. For unsecured debts (no collateral), there is nothing for the creditor to take if you stop paying other than suing you and getting a judgment.

However, if you have secured debts such as a mortgage or a car, understand that these are the creditors that have quicker remedies because they can foreclose on your home or repossess your car without having to take you to court first. I expect mortgage and car loan companies to be more flexible as the government passes needed regulations to ease the burden on millions of consumers. But of course, that still remains to be seen.

(Nothing herein is intended to give legal advice for any specific situation. Ray is currently offering free phone or video consultations to discuss your personal situation. You can call his Valencia office (RJB Law) at 866-477-7772 or (661) 775-4880. Website: www.familyfinancelawyer.com)

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