In Debt During the Pandemic? This is How to Talk to Your Creditors

Coronavirus has caused devastating job losses in countries around the world. Government financial support has helped many, but even with this assistance, the struggles will continue as there may be fewer jobs to return to when this is over.
Work may have dried up for some, but the bills still need to be paid. If you have no source of new income, you’ll need to dip into savings or go into debt.

​Debt Relief in a Pandemic

​Paying back loans is always challenging, and the job market during coronavirus only makes matters worse. One Canadian province lost one million jobs since the start of the pandemic.
Thankfully, regions are beginning to gradually re-open their businesses, and people are going to be able to get back to work. But the economic challenges posed by coronavirus will likely continue for a few reasons:

• Those who have relied on the CERB may find that their former place of employment is no longer in operation.
• Lack of childcare caused by the closure of schools and daycares may require one parent to forego income while they look after their kids during the day.
• Even if you do manage to find another job, paying back loans is a struggle. You may need to cut other expenses and consult a non-profit debt management agency to help you get out from underwater.

It’s easy to fall behind on mortgage payments or credit card bills when you’re not working. You can get a mortgage deferral from the bank or reduce the interest rate you pay credit card companies if you speak to creditors during coronavirus. 

How to Approach Creditors

You’re more likely to get creditors to cooperate if you take the right approach. Keep the following tips in mind.

Get Your Story Straight

Take the time to write out the story of how your income got disrupted and why you need assistance. There’s nothing to be embarrassed about: certain industries shut down, and it was simply impossible to work.

​Speak to Creditors Before They Become Collectors

​Creditors will be more sympathetic to your issues. If there are enough missed payments, the debt could be transferred to a collector, who are typically less sympathetic. Creditors have higher recovery rates, so speak to them from the outset and look to maintain this relationship.

Breathe Deep

Navigating debt repayment can be stressful, but creditors are not your enemy. Take a deep breath and keep calm. It’s in creditors’ best interest to work with you. If you find yourself feeling worked up and not getting the results you want, hang up and call them back after taking a deep breath.

Debt Consolidation Programs

If you’re unsuccessful talking with creditors, a certified Credit Counsellor from a not-for-profit agency may be able to intervene on your behalf. Ultimately, your creditors would like to get as much as they can, and the Credit Counsellor is the intermediary between both parties that helps resolve the situation to everyone’s satisfaction.
You may also get other forms of assistance, like reduced or stopped interest, an end to collection calls, and having various payments bundled into one streamlined monthly payment. 
These may be economically stressful times, but don’t forget there are people you can talk to for real support.