How to Handle Government Shutdowns
President Trump announced on January 25 a three-week halt to the partial federal government shutdown. That doesn’t lift the threat of the government shutting down again if a permanent deal isn’t reached, nor does it mean government shutdowns can’t happen again in the future.
Where does that leave federal workers who see their paychecks disappear or those who depend on shuttered government agencies for their livelihood during a shutdown? If they are like many Americans who live paycheck to paycheck and don’t have substantial savings to tide them over, they enter crisis mode, scrambling to put food on the table or keep a roof over their heads.
February 15 looms large – that’s when the three-week funding bill runs out and another shutdown becomes a possibility. If you could be affected by this potential shutdown, Vasco Assets has some steps you can take to ameliorate the effects. Many credit card companies put policies in place to assist furloughed workers who had difficulty making their monthly payments. Most lenders waive late fees or will refund late fees they’ve already assessed.
Call your credit card company to see what policies it has in place for affected workers. Even if the back pay you receive takes care of January, if the shutdown resumes on February 15, you’ll be ready.
Many credit card companies put policies in place to assist furloughed workers who had difficulty making their monthly payments. Most lenders waive late fees or will refund late fees they’ve already assessed.
Call your credit card company to see what policies it has in place for affected workers. Even if the back pay you receive takes care of January, if the shutdown resumes on February 15, you’ll be ready.
In addition, while you’ll likely become more conservative with your spending during the shutdown, you still have certain expenses that can’t be avoided – food and gas, for starters. If you have a no-interest rewards credit card with a sufficient limit, now is the time to pull it out.
Finally, if you have a good credit score, look into a balance transfer card with a long zero-interest offer. This would allow you to transfer some of your credit card balances, reducing the number of payments you’re trying to juggle during a shutdown. Serious mortgage delinquencies – defined as loans more than 90 days late on their payment – fell to their lowest level since 2006, and overall delinquencies are at an 18-year low.
That means mortgage holders have some flexibility to work with homeowners suffering because of the shutdown.
According to Forbes magazine, many mortgage lenders are offering delayed payments and have waived late fees, as well as looking at assisting furloughed workers to refinance their mortgages.
Fannie Mae and Freddie Mac, for instance, make it easier to refinance and use existing equity to cover short-term expenses.
New-age mortgage company Better Mortgage went one better – it announced a “Shutdown Relief Emergency Refi” that allowed federal employees to use their home equity for a cash-out emergency loan – no payments or interest until 30 days after the furlough ends. How this three-week reprieve might affect that program, especially if the shutdown resumes February 15, remains to be seen. The National Apartments Association (NAA) has provided member landlords with guidance to work with affected federal workers during the shutdown.
Their letter said, in part, “Though apartment owners and operators cannot allow impacted residents to live rent-free, this situation is unique, and the apartment industry is committed to working with residents to bridge this difficult period.”
Like credit card companies and mortgage lenders, the NAA urged its members to waive late fees and accept partial payments during the shutdown, documenting any agreement with affected workers that once the shutdown ended and back pay received, full payment was expected.
Another option to discuss with your landlord would be a split-pay rental option, with half of your rent due on the 1st of the month and the other half on the 15th. This would allow you time to explore other options to make enough money to pay the back half of your rent – whether that be finding short-term employment or taking on a job in the gig economy. Have a gym membership you’ve been meaning to cancel? Or a monthly subscription service that you can’t afford to maintain at this time? You probably have them attached to your credit card, so review your monthly statement and identify those charges, then contact the companies to immediately cancel the service. Some will refund a portion of that month’s subscription fee; others won’t take effect until the next month. Either way, you’ll have unburdened yourself of unnecessary expenses. Understandably, you’re leery of cashing out a portion of your IRA or taking a 401(k) loan. You don’t want to pay the tax penalty or risk having to pay back a 401(k) loan immediately if you end up losing your job.
In addition, if you have poor credit and are short on cash, the option of getting a bank or credit union loan may not be available to you.
However, Vasco Assets has an option to handle this unexpected financial emergency. If your past credit mistakes have foreclosed the ability to get a traditional loan or if time is of the essence, getting a collateral loan through Vasco Assets could save you from getting denied the cash you need.
A collateral loan is a type of loan where you leave something of value with the lender as a guarantee that you will pay the loan back. The thing of value – whether it be jewelry, a luxury watch, or valuable artwork gathering dust in your attic – is known as collateral. The item you leave as collateral can be sold by the lender in the event you fail to pay back your loan.
However, if you’re just needing a short-term cash influx until you receive your back pay from the federal government, you know you’ll be able to repay the loan. In this case, you’re allowing your assets to work for you to get you the cash you need to survive this unavoidable situation.
Work with our knowledgeable and trustworthy agents at Vasco Assets to get fair value for your collateral and walk out with cash to pay your urgent bills, secure in the knowledge that when the shutdown ends, just pay back the loan and get your asset back.
Contact us today at (855) 285-7059 or visit vascoassets.com and receive a free no-obligation valuation of your asset. Together, we can help you through this turbulent situation and bring you peace of mind.