Debt piling up during the coronavirus outbreak? Here’s how to manage it
It’s never ideal to build up debt, but it may be necessary these days.
The coronavirus outbreak has disrupted the economy. Businesses have shuttered and workers have been laid off or furloughed from their jobs. On April 2, the Labor Department reported 6.6 million people filed for unemployment the week prior — bringing the total to 10 million in just two weeks.
If you are in a tough spot and find yourself accumulating debt, don’t beat yourself up right now, said Ted Rossman, industry analyst at CreditCards.com
“It may be OK to carry debt for a while if you have limited other options,” he said.
You can also take comfort in the fact that you aren’t alone.
That said, you should try to manage your bills the best you can so that you can recover once the pandemic has passed.
Make a list
First, make a list of your current debt in order of the most important to least. Your mortgage may be at the top of the list, while credit cards may be a bit farther down.
“It’s really important to get an accounting of what debt you have, what each of the lenders are going to be willing to do for you or work with you, and then devise a game plan on how you are going to attack those different debts,” said certified financial planner Lawrence Sprung, president of New York-based Mitlin Financial.
Reach out to creditors see what options exist for delaying or cutting back on payments.
Already, requests to delay mortgage payments grew by 1,270% between the week of March 2 and March 16. They grew another 1,896% between the week of March 16 and March 30, according to the Mortgage Bankers Association.