PHOENIX, March 24, 2020 /PRNewswire/ -- A March 16 survey by 720 System Strategies found that the coronavirus-related monthly income loss was just $831. In the most recent survey, just a week later, monthly income loss more than doubled to $2,112, a 154% increase.
The time has come to stop paying debt. This advice came from a surprising source: a credit expert who has helped tens of thousands of people rebuild their credit scores.
"Our clients are reporting an average monthly income loss of about $2,112 due to the coronavirus," said Philip Tirone, founder of 720 System Strategies, a bankruptcy marketing firm that surveyed more than 80,000 students in its credit-rebuilding program.
According to survey results, almost 30% of Americans have lost their jobs or seen a significant drop in income due to the coronavirus, and 21% of them reported that they will be unable to pay their bills this month because of the coronavirus; 24% of people said that they have a one-month buffer before they are unable to pay their bills; and 12% of people said they have a two-month buffer.
"In other words, more than half of this population will be unable to pay their bills within two months," said Tirone. "Keep in mind that these figures assume that no one else loses their job or sees any additional drop in income in the coming weeks. As the experts say, 'It is going to get worse before it gets better.'"
Tirone had this advice for people facing financial hardship: "First, call the hardship department for your lenders and creditors immediately. Explain that you have been impacted by the coronavirus, and ask for a revised payment plan on all your debt. If you rent, call your landlord and explain to them the situation."
Doing this will help borrowers protect their credit score, but this should hardly be their primary concern.
"Spend your money, including your stimulus check, on essentials for survival," he said as his second piece of advice. "I believe that income will drop significantly more than it already has, so prioritize protecting your family over protecting your credit score. After all, you can always rebuild your credit score."
Tirone predicted that the number of consumer bankruptcies in 2020 will skyrocket past the 2010 high of 1.5 million consumer bankruptcies.
"We will bounce back," he said. "In fact, your credit score can be 720 just 12 months after declaring bankruptcy. But what if you don't have money to feed your family? It's harder to bounce back from that sort of emergency."
Philip Tirone | [email protected] | 602-691-7570
SOURCE 720 System Strategies