Smack dab in the middle of March, as my freelance work ground to an abrupt halt, I chose to put my financial life on hold by pausing many of my bill payments. It was, at the time, an option I thought too good to be true.
Six weeks later, the phone rang. "It seems your car payment is 28 days past due," a voice on the other end said in a slight Southern drawl. "And, considering your impeccable payment history, we are reaching out as a courtesy before reporting to the credit bureaus." I gulped. Hard.
In retrospect, I'm surprised it took six weeks to get this call; in fact, I was hardly surprised that my car company's promise to waive late fees and cease reporting to credit agencies — one matched by my mortgage lender and credit card company as well — would be impossible to uphold considering the veritable financial tsunami unleashed across America by COVID-19.
The type-A me, responsible for the very fact that I do not get calls from bill collectors, would have freaked out; I, on the other hand, simply sighed. "Well," I said as lightheartedly as I could muster, "I figure I won't be the only American whose credit score plummets as a result of this debacle." I was joking, half hoping for reassurance that my theory was valid. "Yes, ma'am," the VW rep replied. "Will that be all?"
I woke the next morning with a conundrum of epic proportions on my hands: Do I direct what little cash I have on hand — largely gleaned from my 2019 tax refund plus my stimulus check (which, thankfully, hit my direct deposit on April 15 and totaled $1,700 for me and one dependent child; my ex gets to claim the other) — to my car company, or continue to stockpile these meager funds for groceries and cell phone bills?
Pausing my financial life
Arriving at an answer required a bit of backtracking. After my kids' schools closed on March 11, and social distancing protocols made doing my freelance work in the community impossible, I began to explore what pausing my financial life might look like.
I started with my utilities, where there were (and continue to be) no questions asked with regard to paying current, past, and future bills.
Then, I moved onto my credit card company. "Don't sweat it," they said with regard to skipping my minimum monthly payment for up to two months, assuring me that while interest would continue to accrue, late fees and credit markers would be removed after the fact.
My car company sent paperwork in the mail (can you even imagine?) to facilitate tacking my March and April payments onto the life of my loan (yay!); needless to say, something must have gotten lost in the mail. Literally.
I was given the option of applying for forbearance — my loan payments would be postponed, but interest would continue to accrue. If the interest is not paid during that period, it could be capitalized, which means it would be added the principal balance of the loan. Ugh. I took this option but could already see what lay ahead: at some point in the not-so-distant future, I was going to owe a giant lump sum.
Exploring my options and accessing the social safety net
This, I knew, was a short-term option at best; I decided not to be rash and instead explored my options. The CARES Act, which put into place unprecedented benefits for freelance and gig workers like me, has been invaluable.
I applied, and was quickly approved, for the Paycheck Protection Program (PPP). As a sole proprietor of my home-based business, it promises to pay two and a half months of my freelance income (based on my previous year's 1099 earnings). While those funds are not yet available, knowing they are coming gives me space to breathe.
Massachusetts, where I live and work, became one of the first states in the country to provide financial assistance to those not traditionally eligible for unemployment compensation (read: self-employed and gig workers). It took the state just three weeks to build out an entire website for Pandemic Unemployment Assistance (PUA), and in the first few days of the program launch, the Massachusetts unemployment office had already received over 200,000 PUA applications, among them mine.
In the span of just five business days, not only did I apply and get approved for PUA benefits, but six weeks of unemployment benefits were also direct deposited into my checking account. It feels good to know there are safety nets in place, and I am thankful to be benefit ting.
Where things stand now: some bills paid, others still on hold
Here's my most recent update: Have I caught up with my mortgage payments? Yes. I essentially directed my entire stimulus check (adios creative plans to support local businesses and order take-out from the few restaurants in our area that remain open) plus the first two weeks of PUA I received to clear up that murky mess; it felt like the right thing to do.
As far as my car goes, my car company is sending the account to collections because I missed my March and April payments; their system (which is automated) can't catch all the anomalies that are cropping up due to COVID-19. Later, though, they will go in and remove the credit markers and refund late fees.
Am I out of the woods? No, not by a long shot. And here's the thing: I remain uncertain as to how quickly I should start shoveling money back into the system, and I'm trying not to be fearful.
I suppose there is no other choice than to put one foot in front of the other, begin allocating funds to the most pressing places, and say a silent prayer that life — namely my work life — will be back to normal sooner rather than later.
Tuition payments are expected to resume in June, and I'll be poised to pay. As for my daughters' summer camp bills? I think I'll leave those funds in the bank. Just in case life takes longer than I'd like to get back on track.