By Adolfo Hollmann
March 18, 2020
You’ve seen it at least once, if not multiple times, in horror movies and horror series. We all remember that chilling scene of empty streets, with a virus without a cure that seems to float in the air we all breathe, chaos in supermarkets and finally, the collapse of the economy … In reality, even worse, the collapse of our own personal finances. I’m glad to tell you that I’m not here to alarm you even more or offer another opinion in regard to the technicalities of this virus. I think we’re all already very concerned with our own wellbeing and the wellbeing of our loved ones.
The reality may also be that you or your loved ones are not directly affected by this virus. If we want to be positive, and I think that’s one of the few things we can still do, the fatalities are going to decline and those who have the virus will get better and eventually this will be something of the past. It may not be immediate, but only time will tell. Unfortunately, another part of our life that is extremely important to us, apart from our health, is our finances. This issue is already affecting many people directly and for those of us who have children and in general, just monthly expenses that are not going to disappear, this is something that can generate an even higher level of stress. It is important that you know some essential things;
- Things will get worse before they get better. At least here in the United States, it seems that we are at an early stage of the problem. Experts agree that more people will be infected with the virus and therefore the number of fatalities will increase as well.
- Preparation is key. The saying, “we don’t plan to fail, we fail to plan” can’t be truer right now. This is a time for us to plan. We must plan for a worse scenario, plan for a short and long future, plan how we are going to stay healthy and among all this madness we must plan our short and long term financial future.
- There are always options and there is hope. Know that like everything in life there are always options. Today I write to tell you about some of them and how they can benefit you. As you’ve seen, these are times where education and knowledge are extremely important. I’m here to tell you that this is not the end of the world and that we can overcome this if we inform ourselves and if we are willing to help each other.
You’re probably asking yourself what are your options? Let’s start with possibly the most important. Forbearance. It’s not as complex or complicated as it sounds. Quite simply, banks and lenders understand and know that there are extenuating circumstances not foreseen in the lives of their clients and for that very reason they have programs that can allow you not to have to pay your debt temporarily. These extenuating circumstances can happen at any time and to anyone. This is nothing new and your bank and lender have special programs that are available to you. I recommend you start by making a budget. This budget may be simple, but it must be accurate. Consider your income and those of the other people who live with you. This may also be the time to put into use your savings, but not before making those calls to your lenders. When you have a good idea of your budget start the calls. You’re specifically going to ask for forbearance. The representative should know what this means and how to help you. This is also the time to explain your situation and even if your bank knows what is going on in the world be sure to mention it. Explain that you want to be proactive and you want to be a responsible customer so that’s why you’re calling them. Explain your difficulty in making the next 3 months of payments for example. In many cases, the lender can even tell you that you don’t have to make payments for the next 6 months. Usually, in these cases, the lender will only add those 6 months to the end of your loan, but it is always good to hear all the details of how the agreement works. If possible, ask them to send you a confirmation email. Also, note the name and if possible the employee number of the person who you spoke to. Write down the phone number you called, the date and time as well. This can help you in case the lender doesn’t want to comply with what they agreed to. Finally, write down important details about the agreement and ask all the questions you have, you have that right.
Unfortunately, these are difficult times for many of us. Fortunately, we are here. We are a team that’s focused on real estate investments that we are passionate about finances and helping others. We have experience in the area of real estate and banking. We hope to see you back next week to provide more news and information. We will go into other topics such as how to make a budget, how you can lower your expenses and what you can do to eliminate the interest on your credit cards.
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