Now that the federal government’s $600 weekly payments to the unemployed and underemployed have stopped and moratoriums on evictions and foreclosures are expiring, more than two-thirds of Americans are concerned about being able to make ends meet, according to a report from TransUnion.
The failure of Congress to pass additional assistance leaves Nevadans challenged to stretch a weekly benefit that averages $353.63, according to the Department of Labor, and the fate of President Donald Trump’s promised $400 a week extension is unclear.
That has Americans increasingly concerned about their ability to pay bills, even those who were previously less concerned, including 75 percent of white salaried workers, according to a TransUnion survey conducted July 29.
The pandemic is a financial drain on 57 percent of Americans, according to TransUnion, but a greater burden to minorities, with 68 percent of Hispanics and 62 percent of Black consumers affected compared with 54 percent of white consumers. The amount consumers estimate they’ll be short has decreased to $874 in late July from $1030 in May.
The bills that have consumers most concerned may not be the debts they should cover first, say the experts.
As uncertainty becomes the new normalcy, what bills should you pay first? And what help is available to cover the expenses you can’t afford?
Credit Cards (39 percent concerned)
The expense that has the largest percentage of Americans worried, according to TransUnion, should be among the least of their concerns, say experts.
If you can’t make the minimum payment, call the creditor for help. Don’t skip a payment, but don’t fret about paying the balance entirely, according to Money Management International (MMI), a non-profit organization.
Some companies are waiving or refunding late fees for customers who request relief because of the pandemic.
Aside from dinging your credit, failing to pay off your cards doesn’t have life-altering effects, as does the failure to pay other bills.
“Non-payment of certain debts have sudden and dire consequences for your family,” says the National Law Center. “Deal with these debts immediately.”
“Never pay smaller, low priority debts just because you cannot keep up with high priority debts—’If I can’t pay my mortgage, at least I will keep up with my credit cards.’ This is a bad idea,” according to the NLC.
Instead, try to negotiate with creditors to accept lower payments or save the money. You may need it to cover moving costs or to buy another car if yours is repossessed, says the NLC.
“You will not be subject to seizure of bank accounts, income, or property unless you are successfully sued on the debt or there is a default judgment taken against you,” the NLC says of credit card debt. “Interest and late charges may even stop after you are six months delinquent.”
A survey by CreditCards.com reveals more than one-third of respondents have credit card debt. Of those, three in ten said they’ll be challenged to make minimum payments without additional money from Congress.
“At a time like this, it’s important not to get too concerned about your credit,” says Thomas Nitzsche, Financial Educator of
Money Management International. “While you want to do everything you can to protect it, the reality is that there may be no way to fully prevent it from being impacted. Even if you are able to remain current on minimum or hardship plan payments, you will likely be creating additional unsecured debt and may well max out credit cards before things return to normal.”
Minimize your credit card use, if possible. Now is not the time to take advantage of credit cards that offer cash back, according to MMI.
Utilities (37 percent concerned)
Keeping the lights on is the second most cited concern of Americans.
More renters (46 percent) are challenged to pay utility bills than homeowners (37 percent), according to the TransUnion survey.
NV Energy says it was the first utility in the state to suspend disconnections and waive late fees for customers financially affected by Covid-19, but that’s coming to an end for everyone.
Disconnection notices will begin going out in September to customers who have not indicated a financial impact from the pandemic, says spokeswoman Jennifer Schuricht.
“In October, customers who have been financially impacted by COVID-19 and have a past due balance, will be subject to disconnection and would receive appropriate noticing. We want to work with them, and ask them to please call us,” says Schuricht, noting other options may be available.
The Clark County CARES Housing Assistance Program offers some utility assistance, as well, including amounts owed back to March 1. It also provides assistance with housing costs.
The Las Vegas Valley Water District has no relief programs for those affected by the pandemic but its website says customers who are having trouble paying their bills should call the utility.
The City of Henderson suspended water disconnections when the pandemic began.
“We have no plans at this time to reinstitute the delinquent lock-off process,” said spokeswoman Kathleen Richards.
Mobile phone (35 percent concerned)
Phones are more of a lifeline than ever during isolation and quarantines.
In March, more than 390 phone carriers, including Verizon, T-Mobile, AT&T, Sprint and U.S. Cellular, signed on to the Keep Americans Connected Pledge to waive late fees and provide service regardless of ability to pay. The pledge has expired but is still being kept by many carriers.
Rent (35 percent concerned)
More than half of the people who have lost jobs in the pandemic are renters, who make up only 39 percent of the population but are more likely to earn an hourly wage and make less than $50,000 a year, according to Transunion.
The federal moratorium on foreclosures and evictions has expired and Nevada’s expires September 1.
The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker surveyed 11.4 million apartment units and found about four out of five made a full or partial rent payment by August 6. That’s down 1.9 percent – or about 223,000 fewer households — from a year ago.
About one-third of renters in America are uncertain if they can pay their rent, according to a U.S. Census survey. In Nevada, where renters make up 866,662 households, 17 percent say they have no confidence they’ll be able to pay rent in August and 23 percent have slight confidence.
Renters are increasingly turning to credit cards to pay rent (up 33 percent in the second quarter year-over-year), according to Zego, which reports the amount of rent paid by credit cards was up 52 percent for the same period.
“In my home state of Nevada, experts believe that nearly half a million people are at risk of eviction—perhaps as many as 300,000 of them in Nevada by September,” Sen. Catherine Cortez Masto said last week in a release announcing Congressional efforts to secure additional rental assistance.
An executive order signed last week by President Donald Trump does not stop evictions in America, contrary to Trump’s representations, but rather allows local health officials to take action.
A law passed by the Nevada Legislature in the second special session of the summer allows a judge to delay an eviction 30 days while the tenant and landlord attempt to reach an agreement. But there are no guarantees and the delay is limited to 30 days. The measure also authorizes alternative dispute resolution for evictions for any housing programs operated by a public housing authority.
Aside from the moral imperative of keeping people housed during a pandemic, experts say landlords may not be eager to evict non-paying tenants for two reasons — the simultaneous decline of rents and demand.
“New York City, once among the most competitive, hard-fighting rental markets in the United States, is seeing rents decline for the first time in a decade, a decline that will be difficult to reverse,” says a story in Forbes. “And why? Because it’s no longer a landlord’s market.”
“When it comes to rent, our latest analysis shows that rent growth has slowed down to less than 2% year-on-year,” says Dr. Vivek Sah of the UNLV Lied Center for Real Estate
“Our landlords and residents have done an amazing job at maintaining open lines of communication,” says Susy Vasquez of the Nevada State Apartment Association. “We have provided payment arrangements since April 1st and have remained fluid while our residents navigate the challenges of unemployment benefits and fewer work hours.”
“Our goal remains to maintain housing for our residents to the best of everyone’s ability. Rent assistance is being approved which will help many impacted by the pandemic.”
Internet (30 percent concerned)
As living rooms turn into classrooms, connectivity is a necessity, and a statewide coalition is working to ensure all students have access.
In addition to the provisions of the Keep Americans Connected Pledge, free internet access is expected to be available to all Nevada public school students.
Clark County’s 300,000-plus students can get connected to subsidized internet by contacting the Family Support Center at 888-616-2476 where operators who speak English and Spanish are available Monday through Saturday from 7 a.m. to 6 p.m.
Students in other school districts are encouraged to contact school administrators or visit ConnectingKidsNV.org
Car (26 percent concerned)
TransUnion reports payments were deferred on 3 million car loans in June by lenders who are offering a variety of payment options.
Auto title and other short term loans decreased at the beginning of the pandemic as America stayed home and some had fewer financial demands. Now, they are on the rise.
A recent rule change from President Trump’s Consumer Financial Protection Bureau removes requirements that title and payday lenders assess a customer’s ability to repay the loan, making risky title loans all the more perilous.
Medical Bills (26 percent concerned)
More than a quarter of Americans surveyed says they are most concerned about paying for health care.
Doctors report patients are steering clear of primary care providers in the interest of avoiding Covid-19, but there are routine health issues that can’t be delayed — an especially troubling prospect for the unemployed.
“I am going to give birth to my daughter on September 3 and I don’t know what I’m going to do, says Andrea Parker, who filed for unemployment when she was laid off in March because of Gov. Steve Sisolak’s mandate that businesses close.
“I’m eligible, then not eligible, then eligible again,” she says of the letters she’s received. What she hasn’t received is money.
If it’s a Covid-19 test you need, the state provides them free to the uninsured.
Beyond that, the Silver State Health Exchange offers low-cost policies but limited enrollment windows. Nevadans who meet eligibility requirements may apply for Medicaid.
Southern Nevada’s public hospital, University Medical Center, provides care for the indigent, and a number of free and low-cost medical clinics are scattered throughout the state.
Mortgage (21 percent concerned)
One or two missed payments won’t land you in foreclosure, but they add up quickly and could result in the loss of your home.
Low interest rates make refinancing especially appealing for those who qualify, but do it now, as a hike in costs is expected in September.
Lenders are also facilitating loan workouts, deferred payments, and in some cases, adding past due amounts to principal.
Experts are unsure whether panic selling will take hold as foreclosure moratoriums expire.
“It is difficult to say and will depend upon how many lenders are able to give additional months of mortgage relief to borrowers,” says UNLV’s Sah.
Sah says prices could drop by three to five percent by the end of the year in Clark County “if we don’t get any medical intervention in the next few months. However if we do get it, then prices are expected to remain steady as employers are more likely to bring back the lost jobs in anticipation of a quick recovery.”
The Las Vegas market “is going to be hit worse than others due to our exposure to gaming and hospitality (more than 40% directly or indirectly),” Sah said via email. “With the budget cuts across the board, even with any medical intervention in the coming months, our conventions and tourism business will be dampened until next summer at least. Our recovery may start around then.”
Sah says he’s seeing the “direct or indirect impact on the house market, both for sale and rent.”
Prices have remained steady thanks to demand from qualified buyers. But Sah cautions that’s just one metric.
“Sales and new listings have been down almost 50% year-on-year, which means that the housing market is being impacted in some shape or form,” he says.
Sah expects to see “a large impact on the housing market in some shape or form in the next two to three months.”
Student loan (18 percent concerned)
Emergency relief granted in March under the CARES Act has been extended to the end of the year for some 40 million borrowers. It was slated to expire September 30, just before the election.
, but President Trump signed a memorandum extending the relief to the end of the year, but the Institute of Student Loan Advisors cautions the details of the extension are awaiting interpretation from Department of Education.
Personal loans (18 percent concerned)
Applications for new credit plummeted from the onset of the pandemic through May, as Americans received stimulus checks from the government, according to data from the Online Lenders Alliance.
Personal loans, which sometimes use household goods as collateral, are considered low priority by the National Law Center, because creditors rarely invest the time and expense of obtaining a court order.
Purgatory of unemployed
Nearly one in five American consumers are unemployed and 87 percent are concerned about how they’ll get by, according to TransUnion.
In Nevada and other states, some of the unemployed have gone without pay or benefits since March.
A lawsuit filed on behalf of Nevadans who have not been paid unemployment has yet to put money in the hands of frustrated applicants who have spent countless hours on the phone and internet to no avail.
The Governor’s Task Force, headed by former MGM CEO Jim Murren, has been dedicated to acquiring personal protective equipment and most recently, ensuring students have internet service, but it has not taken up the overarching glitch that has left thousands living in despair and with no help in sight.
Francis, a retired Clark County employee who worked at the Regional Justice Center, lost the construction clean up jobs that kept him afloat before the pandemic. He applied for benefits in March but has yet to see a penny. Francis, who did not want his last name used because he’s embarrassed, said he’s using the small payments from his county pension to buy a room in a residential motel for two weeks at a time before returning to his car for the rest of the month.
Jameelah Walls, a single mother with two toddlers, was told in April she qualified for benefits only to learn recently she’s not eligible.
“I’ve already lost my vehicle and I am nearing homelessness with my children and this is highly unfair because I have been a faithful employee in the state of Nevada,” she says.
“I called on Saturday and the representative asked if I have a utility bill for this address,” says Las Vegan Lisa Fragoso, who says she filed for unemployment in April and has yet to receive a payment. “I already explained I’m renting a room, I have no utility bills or mail here at this time.”
Her belongings at Storage One are scheduled to be auctioned on August 20 for non-payment.
A park in West Las Vegas is named for Fragoso’s grandfather, James Gay III.
“Vegas strong,” she says sarcastically. “I’m so disappointed.”