Coping with Crisis: 14 days

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When crisis, like COVID-19, attacks us, it is critical to control the things we can amid the chaos. Our communities are currently facing unknown challenges. Our newest services provided through our Lakeway Financial Opportunity Center are exactly what is needed in this time: Financial Guidance, Job Coaching, and access to resources. We can help! For free individual services call 865-828-5927 or email elizabeth@clinchpowell.net. Clinch-Powell has been a leader for 30 years in assisting individuals, families, and communities during times of need, and we will continue to serve you through this difficult time. For the next several days our FOC coaches will be posting information to assist you with addressing the concerns that are arising as a result of the COVID-19 situation, particularly the financial impact this will have. Lakeway FOC is in partnership with Rural LISC.

Part 1: Make a Plan!

Don’t panic. This isn’t always easy, but our certified coaches at the Lakeway Financial Opportunity Center can help, and there is no charge for our services at this time. The best way to combat anxiety is to make a plan. Scientific evidence has proven overwhelmingly that anxiety impacts the parts of the brain that are related to decision making. It has always been our strategy to help our clients develop crisis management plans to ensure that they can weather emergency situations. But even if you do not already have a plan in place, you can start where you are and begin to plan your next steps. Our FOC coaches are here to help you make a plan that will get you through this situation with the least amount of negative impact. Call 865-828-5927 or email elizabeth@clinchpowell.net to get started.

Part 2: Create a Crisis Budget

Health is one of the primary issues weighing on our minds at the Lakeway Financial Opportunity Center right now, but the impact that social isolation has or will have on your finances is just as serious. Creating a crisis budget is necessary in times like these. Our Lakeway FOC coaches are experts in crisis budget management and can help you prioritize expenses and minimize financial strain as we weather the current economic situation. Many people are facing lay-offs, reduced hours, and increased expenses as everyday necessities such as food and household supplies rise in cost or become more difficult to find. As government entities and local organizations are trying to develop solutions, people in our communities continue to search for ways to cope with the everyday struggles. It is critical to honestly look at your current spending and determine what can be eliminated. Is it essential? If not, cut it. Can you switch to a less expensive cable package? Can you negotiate a reduction in credit card payments temporarily? Let us help you navigate these difficult situations and be an advocate for you in working with creditors and lenders. There is no charge for these services at this time. Call 865-828-5927 or email elizabeth@clinchpowell.net to get started.

Part 3: Dealing with Loss of Employment

Our coaches in our Lakeway Financial Opportunity Center are standing on the front line to help you. Many companies are reducing hours or laying off employees right now. Should you ride this out on unemployment? Should you take another job? These are not easy decisions to make. Unemployment is helpful when jobs are lost, but it only pays a fraction of what you were earning in most cases. The answer to this question depends on many things: your expenses, debt, skill set, location, etc. The Lakeway Area FOC has staff dedicated to career development and strategy building in tough times. Let our career coach help you evaluate your decisions. As an official American Job Center Partner, we can help you with job search and the unemployment process. These services are at no cost to you. Email elizabeth@clinchpowell.net or call 865-828-5927.

Part 4: Take advantage of available resources.

Many groups and organizations are offering assistance right now, and the coaches in our Lakeway Financial Opportunity Center are ready to help you navigate those resources. The Government will soon be offering relief packages, and you may have just received a tax refund. Deciding how you will deploy those limited resources right now is one of the most important decisions you will make. With so many “programs” being discussed in the media it is difficult to know what is real and who qualifies for what. And there are always scammers trying to take advantage of those in need! Part of the Lakeway FOC’s services include resource linkage. Building on Clinch-Powell's 30 years of community and government partnerships, we can help you navigate and access resources available to you. Let us help you take out some of the guesswork in what is already a stressful time. Email elizabeth@clinchpowell.net or call 865-828-5927.

Part 5: Tax Filing and Refunds

Coaches at our Lakeway Financial Opportunity Center want you to know that there are a few critical things to be aware of regarding tax refunds. First of all, if you have filed and are anticipating a refund, or have already received one, the best course of action is to use the funds cautiously. A tax refund is a good opportunity to build a financial cushion in any circumstance, but now more than ever being cautious with how you use the funds is critical. Being strategic with what you pay and what you save can make a difference in how you weather the upcoming weeks and months. Our Lakeway Financial Opportunity Center coaches can guide you through that process and help you determine the best course of action in using your funds to create more security in this uncertain time. A second thing to be aware of is that you need to file your taxes as soon as possible if you have not already done so. The IRS has extended the deadline for filing until July 15th, but as the Corona Virus crisis continues to expand, the IRS will become more and more inundated with challenges. Getting your return in earlier could make a difference, and may even impact how quickly you are able to receive any stimulus relief funds that you may be eligible for. If you are concerned about payment owed to the IRS that you cannot afford due to recent loss of income, the best course of action is to contact a tax professional who can assist you with possibly filing for a payment deferment or setting up a plan. For official information on the IRS’s policies and procedures during this time visit IRS.gov. For guidance on using your tax refund to help navigate these troubled times, contact one of our FOC coaches. Call 865-828-5927 or email elizabeth@clinchpowell.net.

Part 6: Avoid Fast Cash and Predatory Lending

Predatory lending is any lending practice that imposes unfair or abusive loan terms on a borrower. Outrageous fees and punitive high interest rates set a trap for vulnerable borrowers. In times of crisis turning to “fast cash” and other quick and easy high cost financial solutions often seems like the best choice. Sometimes it seems likes the only choice. It isn’t. There is always a better way. Our Lakeway Financial Opportunity Center coaches can help you find that better way. We work with so many people who have been caught in the trap of high cost lending. It never makes things better. It always causes more difficulties just around the corner. The report, "Fighting Predatory Lending in Tennessee," reported that Tennessee had the most predatory lenders in the country in 2017 with more than 1,200 locations across 89 of the state's 95 counties. Demand for payday loans is huge. Payday lenders or check cashers, which charge annual interest rates up to 600% are used by more than 12 million Americans, according to the Pew Research Center. There are other more affordable resources, especially as organizations and agencies across the state step up to offer help. Let us help you avoid the trap. Contact us today at 865-828-5927 or elizabeth@clinchpowell.net!

Part 8: Understanding the CARES Act

The CARES Act is the largest federal government funded stimulus package to be offered in history. It is 880 pages of legal terminology laying out how $2 Trillion dollars will be funneled into the U.S. economy to offer relief and support for Americans during this uncertain period in our history. Our Lakeway FOC coaches have read the entire thing and are prepared to help you use the information to your advantage. Full disclosure: We are not attorneys and are unable to legally interpret what is in the bill, but we have pulled relevant information from the bill and other legitimate sources in order to best serve our clients. We are sharing important information that you should be aware of.

Most people will receive a stimulus payment.

Individuals who are single and making $75,000 or less in annual income will receive a onetime payment of $1200.00. Individuals making between $75,000 and $99,000 will receive a reduced amount. The amount received is reduced by 5% or $5 for every $100 earned above $75,000 up to $99,000.

Married couples making 150,000 or less annually will receive a onetime payment of $2400. Couples making between $150,000 and $198,000 will receive a reduced amount. The amount received is reduced by 5% or $5 for every $100 earned above $150,000.

Individuals and/or families will receive an additional onetime payment of $500 for each dependent child who is under the age of 17.

Individuals who receive Social Security or Social Security Disability payments will receive stimulus payments as well.

It is important to note that not everyone will receive a stimulus payment. Those will not be receiving funds are undocumented citizens, adults who are claimed as dependents on someone else’s taxes (college students, for example), individuals who owe unpaid back child support, individuals who have not filed taxes in 2018 or 2019 other than those receiving monthly payments from the Social Security Administration.

Your stimulus payment will come to you in one of two ways:

The preferred way to receive your payment is via direct deposit. Your funds will be automatically deposited into the bank account that the U.S. Department of Treasury has on file for you. This will be the account you last used when you filed taxes, or the account that your Social Security Administration payments are currently deposited into. You do not need to do anything to request your funds. If your account information has changed the Treasury department is setting up a portal for individuals to update their information, but this has not been completed as of this date. The deposits are anticipated to begin as early as April 6th and be completed by April 24th. This is the estimate that the federal government has provided.

You may receive your stimulus funds via check if you did not use direct deposit for your tax filing in the last two years. The Department of Treasury will mail a check to the address they have on file. Receiving the payment via check will take much longer. The Treasury Department anticipates this could take up to 20 weeks. Some families may not receive funds until September.

If you would like more information or assistance taking advantage of the resources that this Act is providing to you. Call 865-828-5927.

Part 9: Expansion of Unemployment Benefits

Part of the services provided by the Lakeway Financial Opportunity Center is Employment coaching, which includes assistance with applying for unemployment benefits. As a partner with the American Job Center, we can help you navigate sometimes confusing process. Call 865-828-5927 for more information. The CARES Act, signed into law on March 23rd is expanding unemployment benefits to offer additional assistance to those who have been impacted by the COVID-19 pandemic. Some key changes to Unemployment Benefits under the CARES Act include:

Changes in who can apply for unemployment

In order to qualify for the unemployment expansion applicants must be able to certify the following:

That they are able and willing to work but are unable to do so because they have been diagnosed with or are experiencing symptoms of COVID-19 and seeking a medical diagnosis, if a member of the individuals household has been diagnosed with COVID-19, or if they are providing care for a family member or household member who has been diagnosed with COVID-19 .

That they are unable to work because they have children or other dependents in the household who are unable to attend school, child care facilities, or other necessary care facilities as a result of closures due to the COVID-19 public health emergency which are required in order for them to be able to attend work.

That they are unable to attend work as a result of quarantine imposed as a direct result of the COVID-19 emergency or they have been advised by a health care professional to self-quarantine due to COVID-19 concerns.

Individuals whose place of employment is closed as a result of the COVID-19 emergency or were scheduled to begin a job and were unable to start, or had to quit a job as a direct result of the COVID-19 emergency are eligible to apply.

Additional Key Changes to eligibility include:

Allowing those who have already exhausted their unemployment benefits to apply if they lost employment as a direct result of the COVID-19 emergency.

Allowing those who are self-employed with no sufficient work history to apply if they are seeking at least part-time employment.

Changes in the weekly benefit paid.

Under the CARES Act, the unemployment expansion includes an additional $600 per week above the state payment. The maximum amount that can be drawn in the state of Tennessee is $240 per week. That amount is determined by the number of weeks you have worked prior to your claim and will vary from person to person. But the maximum total benefit under the expansion in the state of Tennessee will be $840 per week.

The length of time unemployment can be received.

Under normal circumstances, the maximum length of time individuals can receive unemployment benefits in Tennessee is 26 weeks. The Unemployment expansion under the CARES Act increases that by an additional 13 weeks if necessary.

For more information on the unemployment process in Tennessee visit https://www.tn.gov/workforce/unemployment/apply-for-benefits-redirect-2/what-to-expect-after-you-file.html

Coping with Crisis Part 10:

Relief Options for Homeowners and Renters:

Keeping a roof over your head is likely one of your primary concerns during this time, as it should be. The Lakeway FOC staff has experienced HUD certified Housing Counselors on staff who have worked with hundreds of people to help them with housing crisis over the years. Thankfully the current measures taken by the Federal Government in the CARES Act do include relief efforts for those who have mortgages and for renters.

For Homeowners:

The CARES Act states that any homeowner who has a mortgage that is federally insured or guaranteed will not be foreclosed on for at least 60 days beginning March 18th. This is called a moratorium. This has been put in place to allow time for those borrowers to request assistance through their servicers (the companies who handle the mortgage accounts). If your loan is a covered loan, you can be eligible for forbearance under the CARES Act if your difficulty in paying your mortgage is related directly or indirectly to the COVID-19 pandemic.

Forbearance under the CARES Act looks like this: You will not be required to make a payment for 180 days without being charged any additional fees, penalties or interest above what you would have paid if your mortgage payments had been made as scheduled. To qualify for this you must submit a request to your servicer and certify that your hardship is related to the COVID-19 crisis.

A federally insured or guaranteed mortgage is essentially a loan that is subsidized or insured by a federal government loan program. These can include USDA Rural Development Loans, FHA, VA loans or Fannie Mae or Freddie Mac to name a few. To find out if your loan is federally insured or guaranteed, start by calling your servicer. You can also find out if your loan if owned by Freddie Mac or Fannie Mae by clicking one of the following links.

Once you know if your loan qualifies for relief, you can begin to request relief options with your servicer. Call us and one of our experienced counselors will work with you and your lender.

For Renters:

Not all landlords are required to offer protections under the CARES Act. Landlords who have rental properties that have mortgages which are federally backed loans or landlords who participate in government funded housing programs or receive federal funds to operate their rental properties will not file for evictions for 120 days beginning on March 27th, the day the CARES Act was signed into law. They also are not to charge fees or penalties related to non-payment of rent during this time. However, this does not mean the CARES Act says you get to live rent-free for 120 days. You will still owe the rent for that period, you just won’t be evicted for 120 days.

Remember, not all landlords are required to offer these provisions and if you are able to make you rent payment you should. If you cannot, contact your landlord as soon as possible to try to work out a payment plan. Communication is key in all situations as landlords depend on rental payments for their own personal livelihood as well. Our coaches are always here to help and you can reach us at 865-828-5927 or reach out to Elizabeth@clinchpowell.net.

Coping with Crisis Part 11:

Avoiding Scams

When a crisis like the COVID- 19 pandemic hits us we often see a lot kindness rise up. This is a testament to the heart of most American People. But unfortunately, there are always those who will try to take advantage of the vulnerability that disastrous events like this cause. The Lakeway Opportunity Center staff is always taking measures to educate and inform the community about scammers and predatory practices. Contact one of our coaches today at 865-828-5927 if you have any questions about a charity request you have received or a service you have been offered. We can help you determine if it is safe! Here are some tips to help you avoid being taken advantage of by scammers.

Research before you give

Most people instinctively want to help in times of crisis, and many charitable organizations need additional support when things are hard. Scammers know this. Many will pose as representatives of legitimate organizations in order to take your money. If you are contacted by someone soliciting a donation, do your research before you give, especially if it is a person or group you are unfamiliar with. A legitimate organization will have no trouble offering you an opportunity to verify information before they take you money. Visit the organizations website. Call and ask about the solicitation practices. If it a local charity, you can verify the employment of the person who contacted you. This applies to any solicitations or advertisements you see on social media or receive via email as well. The best practice is to stick with the groups you know. If new groups are popping up, be especially careful.

Research before you give help long distance family or friends

While some scammers are posing as representatives of charitable organizations, some are posing as loved ones in need. If you have a friends or family who live in a different location and you receive a call or email from them requesting financial help, make sure you know it is them. Scammers have gotten very good at impersonating others. They often take advantage of elderly or disabled individuals who may not fully understand how technology works to create a scenario where they believe they must send money to a loved one in need. Always confirm that you are in fact talking to your family member or friend before sending money, even if they appear to be in a hurry.

Be aware of scams related to professionals offering services and products

The Federal Trade Commission recently issued a statement warning the public about individuals offering vaccines, treatments and other services to those who have been impacted by COVID-19. (See FTC warning)

There is currently no cure or vaccine for COVID-19 and testing is never done at home. You must contact your local health department or medical care provider to obtain care. Additionally there are no products currently approved to deter the virus beyond protective gear such as masks and gloves. Do not fall victim to those trying sell products or services.

Scams targeting those who receive Social Security Benefits

There have been no changes to the way that the Social Security Administration processes your monthly benefit payments. You do not need to update or provide information to the Social Security Administration. If you receive a call requesting any personal information on behalf of the SSA, it is very likely a scam.

Resources

You can always contact the Lakeway FOC with any questions you have. Additionally the Consumer Financial Protection Bureau has great resources available for coping with this crisis.

Coping with Crisis Part 12:

Relief for Small Businesses

The COVID-19 crisis is particularly hard on small businesses. They are the economic backbone of our local communities and the focus of Clinch-Powell has always been on supporting our local communities. For nearly 15 years, we have worked in partnership with USDA and local banks to provide small business loans and support. The CARES Act includes some relief for this important sector in our community and we want to make sure that information gets out. If you need guidance on this topic, please contact us at 865-828-5927.

Paycheck Protection Loans

This loan option from the Small Business Administration, is available to businesses and non-profits with less than 500 employees that were in operation on February 15th, 2020. The loan purpose is to keep employees on the payroll. The interest rate is 1%. Application for these loans must be made through a local lender who is approved to make SBA 7(a) loans. There are some variations on business size depending on the business sector, particularly in the food and hospitality industry. Application must be made by June 30 but funds will go quickly.

The funds can be used for payroll support, including benefits, salary and wages, and some mortgage, rent and utility payments. The amount of the loan is calculated as one month of payroll expenses multiplied by 2.5. Borrowers who agree to maintain the same level of employment for the 8 weeks following the origination of the loan may be eligible for the loan to be forgiven up to 100%.

Economic Injury Disaster Loan

This program already existed, but has been expanded during the COVID-19 crisis. The expanded funds and relaxed terms are available until December 31, 2020. Like with the Payroll Protection Loan, businesses or non-profits with less than 500 employees are eligible. The CARES Act is waiving the requirement that the business must have been in operation for at least a year to receive these funds during the COVID-19 crisis. Non-profits receiving medicaid expenditures are not eligible.

The Loan amount can be up to $2,000,000 for working capital. The total amount is based on average total amount of payroll cost, mortgage or rent cost, and other debt payments incurred by the business or organization for the previous year. The interest rate is 3.75% for businesses and 2.75% for nonprofits with a 30-year term possible. There is an automatic one-year deferment on repayment so the first payment is not due for a full year, although interest begins to accrue at time of disbursement. You can also request an emergency $10,000 grant as part of this application that does not have to be repaid.

The funds can be used for paying fixed debts, payroll, accounts payable and other costs. They cannot be used for refinancing debt, paying on loans owed to other federal agencies, or to pay tax penalties owed. They cannot be used to repair physical damage to property or to pay dividends to stock holders. It is important to note that if you obtained a payroll protection loan under the CARES Act, you cannot obtain this type of relief loan for the purpose of paying payroll associated costs. The funds cannot be mixed.

Additionally, there are some tax credits available to small businesses as well. Talk to your tax professional for more details on this. Apply directly for these loans here.

Clinch-Powell maintains a small business loan fund and you can apply for funding on our website