I have bills I have to pay but no income.
That despairing line was repeated over and over again in interviews with pandemic-furloughed workers on last night’s news.
COVID-19 has ground the economy to a halt, no one’s working, and no money is flowing.
Whether it’s called social distancing, shelter in place, quarantine, or lock-down, hordes of us are off work and out of public spaces.
Yet the worry about meeting our financial obligations weighs everyone down.
I want to tackle just a small piece of the problem, the sense that there are bills one HAS to pay.
Maybe usually.
Maybe eventually.
But not necessarily now.
This consumer lawyer‘s take on our situation suggests that you set aside existing money habits and fretting about the future.
Stress itself is deadly, and your first goal is to stay healthy.
What you need to know to tamp down stress
Why do you HAVE to pay?
Let’s look at why everyone interviewed repeated that they HAD to pay bills.
What is it that makes payment imperative?
At bottom, you have to pay to avoid unpleasant, legal consequences: eviction, garnishment, repossession, or levy.
Legal consequences take time. They also take lawyers, judges, process servers, and tow truck drivers.
And, right now, all of those folks are also at home, off work. They aren’t available to impose legal consequences on you for non-payment.
Further, many jurisdictions have banned evictions, foreclosures, and collection actions.
The turnip theory of collection
Smart creditors (the people you owe money to) know, just like our grandparents:
You can’t get blood out of a turnip.
Or, as I tell bankruptcy creditor clients, there’s no point in suing someone who has nothing available to pay a judgment.
And, for the moment, most all of us are turnips.
The antelope survival strategy
How do relatively defenseless African antelopes survive as a species when faced with hungry lions?
It’s simple: they birth their calves all at the same time. Thus, there are far more infant antelope than it takes to keep lions well fed.
A few young are eaten while the rest grow stronger and faster each day and able to elude lions.
Consumers who have fallen behind on bills during the pandemic are the equivalent of young antelope: there are far too many debtors for the creditor class to gobble up.
And for that reason, either self interest or governmental intervention will shield consumers from the usual consequences of not paying their bills.
The problem is simply too big for the usual rules to work.
The pen is mighty
Every creditor’s interim advice to consumers is “let us know you’re hurting”.
Do it: write each of your creditors with a short explanation of how the pandemic has impacted you. Save a copy.
Get on record that you can’t pay for a damn good reason.
Survival expenses come first
Focus first on food and medicine. Things necessary to keep body and soul together.
Maybe add transportation to the extent necessary to gather food and medicine.
Note that these are “here and now” expenses, not left-over debts from before coronavirus.
When pandemic passes
Each of us can take solace in the fact that millions of us are in the same financial boat.
I fully expect there will be overarching remedies, governmental and business. One of the most widely discussed (though superficial in my view) is a bar on negative credit reporting tied to the national emergency.
In the meantime, take care of yourself and your immediate needs.
Stay home, stay healthy, and stay hopeful.
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Pandemic money tips on cars, mortgages, taxes, etc.
