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Suddenly unemployed due to the coronavirus? A credit counselor may be able to help

These non-profit agencies can provide vital information and helpful advice

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Millions of Americans have found themselves unemployed in the last two weeks as the coronavirus (COVID-19) has shut down businesses across the country.

Congress has passed the CARES Act, providing cash payments to individuals and increasing the amount and duration of unemployment benefits. But many families and individuals may need help in adjusting to their new circumstances, and a non-profit credit counselor may be able to provide some of this assistance for a very small fee.

Bruce McClary, vice president of marketing at the National Foundation for Credit Counseling (NFCC), reports that his member agencies have already seen a large increase in the number of consumers turning to them in the last two weeks.

Member agencies in Florida, for example, have pulled people off the marketing side and deployed them to support service delivery -- and every situation is different.

“Many of these people who’ve been laid off or had their hours cut back will be able to return to full-time employment down the road,” McClary told ConsumerAffairs. “So it’s just a matter of having the kind of structure in place to support them through this period of time which will certainly be temporary.”

Familiar with forbearance plans

If you’re a homeowner who is suddenly unemployed, you may be wondering how you’re going to pay your mortgage. McClary says non-profit credit counselors are up-to-date on what specific lenders are providing in the way of forbearance.

Since many credit card companies have had to shut down their call centers in other countries because of the virus, many consumers have found it difficult to talk to someone about their account. McClary says NFCC can handle a lot of those inquiries if consumers call a credit counselor or call NHCC’s toll-free number, 1-800-388-2227.

“Our infrastructure, which is already in place and based entirely inside the United States, is not impacted by the effects of the coronavirus,” McClary said. “So we are able to handle the volume that’s coming in.”

Services offered

Even before the new social distancing protocol, credit counseling agencies were set up to handle many of their clients online and over the phone. The initial session with a credit counselor is free, and McClary says consumers can get a lot of helpful guidance in that hour to 90-minute session.

“Our counseling agencies are helping people create an emergency budget that’s realistic and based on their circumstances, and then to create an action plan to address the challenges they have with their obligations like their credit card companies and their mortgage, and then assisting them through those challenges,” he said.

The cash payments going out to all Americans this month can help meet short-term essential expenses for the newly unemployed. For everyone else, McClary suggests a prudent approach.

“If things are fine for you and you haven’t lost income, but you don’t have an emergency fund, the best thing you can do with that check at that moment is take it all and put it straight into your emergency savings,” he said.

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