While many of our friends and clients are tearing out wet carpets, wet sheet rock, throwing out their furniture and trying to navigate the muck of insurance and FEMA, they may not be thinking about personal finances. However, this piece of advice may be very timely.
If you have any of the following, you need to call the bank or provider this week:
Car loan
Credit Cards
Mortgage
Student Loans
or many other types of loans
Here’s why: In declared disasters there are provisions in place to help you and to ensure your credit stays in tact. I’ve verified how the process is handled with several lenders. If you call and request that they suppress payments, they can do that for up to a few months if you find that you are going to have a hard time making those payments.
Credit card companies for example, will not charge you late fees if you are marked as living in the disaster area. At your request they can also suppress payments for a while. Normally, if you are more than 30 days late making a credit card payment that will be reported to the credit bureaus and can negatively impact your credit score. Following a disaster, if you request suppressed payments, this is not the case.
You mortgage company can suppress payments for up to a few months. But, it’s important to take note of how they’ll want you to make up that amount. You should ask on the phone before agreeing to suppress payments. In one instance, the whole amount that was suppressed becomes due at one time at the end of the payment suppression period. However, you can request other options such as rolling the suppressed amount into your mortgage or adding the payments at the end of your mortgage.
Other lenders for products such as student loans, auto loans, etc. will also have similar provisions in place. Give yourself some breathing room. Take a break from the clean up this week and call all of your lenders to ask them to suppress payments if you need some flexibility. They won’t charge you penalties or fees for this service. Just make sure that you set a reminder to start making the payments on time at the end of the suppression period.
