• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

National Debt Relief

National Debt Relief - A+ BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

Talk to a debt counselor toll free:

800-300-9550

Get Relief From Credit Card Debt

Medical Bills and Unsecured Loans

  • Apply Now
    • Qualifications
    • Is This Right For Me?
  • Proven Results
    • Debt Relief Benefits
    • Credit Card Debt Relief
  • Debt Relief
  • Credit Card Debt Relief
  • Debt Consolidation
  • Login
HomeBlog FinanceHow Furloughed Employees Finances Have Been Effected
Video Transcript

Free Debt Consolidation Quote

By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
  • National Debt Relief, LLC BBB Business Review
  • McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams

How Furloughed Employees Finances Have Been Effected

January 30, 2019 by Libby Donovan

learn about furloughed employees finances
couple sitting on couch with no money figuring out how to handle finances during furlough

The longest shutdown in government history officially ended on January 26th, 2019. For over a month, all non-essential employees were furloughed, including many who are considered essential. These essential workers, such as air traffic controllers and TSA agents at airports, were forced to continue to do their jobs without pay. Approximately 800,000 federal employees were affected by this government shutdown, not to mention all the contracted employees who were also affected. Due to the length of this shutdown, huge financial ramifications were felt by many.

The Potential Impending Housing Crisis

This, most recent shutdown, had pretty far-reaching effects. According to Zillow Research, $438 million is owed by government workers in mortgage and rent payments for the month of January, payments they’re expected to pay despite having received no income. Of that amount, $249 million is due in mortgage payments.

People who rely upon assistance from the Department of Housing and Urban Development for help paying their rent didn’t receive their payments either. HUD did send out letters asking property owners to halt evictions for federal employees who weren’t able to pay their rent, but, that leaves the financial burden on the owners.

Aside from contractors hired by the government (who were furloughed without the promise of back pay), workers at stores and restaurants in and around federal buildings, and travelers who faced long lines at airports, the shutdown has wreaked havoc with mortgages and credit from people all over the country who don’t hold government jobs.

Each business day, 3,900 FHA or other government-insured loans are processed. With only a skeleton crew left managing operations, these processes were severely delayed during the shutdown and could take some time to catch up.

In addition, during the shutdown, employment verification for federal employees couldn’t be done for loans, nor could income verification be done by the IRS, causing delays or even denials of loans from Fannie Mae and Freddie Mac, the two companies that insure most mortgages. A short-term shutdown may not have had a huge impact on the housing market, but a long-term one has had much more far-reaching effects.

The Potential Effect on Credit

For furloughed workers or those who worked without pay, bills were still due and missed payment penalties could still be felt. Even without the shutdown continuing, having missed any monthly payments to lenders could have meant costly late payment fees, and an adverse effect on credit scores, which could have cost the consumer a lot of money in higher interest rates. According to FICO, a missed payment can cause your credit score to drop 90-110 points.

The damage isn’t immediate, however, and it’s worth noting that lenders can’t report consumers for late payments right away. Consumers have to be 30 days delinquent (after the due date) before the lender can report the delinquency to the credit reporting agencies, so many government employees should have the chance to catch up on their payments before they see too big of an impact on their credit.

Even with the shutdown being over, it’s important for consumers to call their lenders and speak up about payments during the shutdown. In past government shutdowns, some lenders have delayed sending derogatory information on their furloughed customers so that their late payments didn’t negatively affect their credit. Other lenders may let borrowers skip a payment, but they’ll probably keep the accrued interest on the account.

While lenders were under no obligation to help, many stepped up. AT&T waived fees and grant extensions to federal workers on their bills. The other major phone companies (Verizon, T-Mobile, and Sprint) were willing to help too. Banks and other credit unions helped out government workers by offering 0% interest loans and waiving mortgage and credit card late fees, and waiving overdraft fees.

As The Simple Dollar points out, there’s little that the credit reporting agencies (TransUnion, Experian, and Equifax) could do to help consumers during the shutdown. They merely put the information that’s furnished by lenders onto consumers’ reports. They don’t know who’s been furloughed, and they simply don’t have the ability to mark a credit file as late due to the shutdown. The most effective way for consumers to avoid damage to their credit score is to call the lender directly.

While the shutdown may finally be over, furloughed employees are far from done with dealing with its long term effects.

Do you qualify for debt consolidation?

Primary Sidebar

Consolidate Your Debt!
Find out how NDR could help.
  • Get one low monthly payment
  • Avoid bankruptcy
  • Get out of debt in 24-48 months
Get Your Free evaluation
Free Debt Consolidation Quote
By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
 Trusted By Our Clients

"Great service!"

I found two great services overall in your customer service and the service in which you provide as a company. You help individuals like myself that went through hard times get back on their feet. I can't thank you all enough.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Tommy Herburger
ConsumerAffairs Reviews

Latest Finance Posts

  • How Does Congress Plan Out a Fiscal Policy?
  • How Furloughed Employees Finances Have Been Effected
  • Amazon HQ2 And What It Means To New Yorkers
  • 6 Women Who Are Taking Over The Cryptocurrency Market
  • Artificial Intelligence And The Automation Of Finance
National Debt Relief, LLC BBB Business Review AFCC Top Ten Reviews Gold Top Consumer Reviews Consumers Advocate Trust Pilot
Company
  • About Us
  • Contact Us
  • Blog
  • Careers
  • Corporate
  • Privacy Policies
  • Terms Of Site
  • Disclaimer
  • Sitemap
Products
  • Debt Relief
  • Credit Card Debt Relief
  • Debt Consolidation
  • Debt Settlement
  • Calculators
  • FAQs
Debt Resources
  • Credit Card Debt
  • Bad Credit
  • Medical Debt
  • Personal Loan Debt
  • Unemployment
  • Divorce Debt
  • Retiree Debt
  • Veteran Debt
  • Business Debt
  • Personal Finance
Follow Us
  • Facebook
  • Twitter
  • Linkedin
  • Instagram
  • Pinterest

© 2021, National Debt Relief, All Rights Reserved.

Disclaimer
Disclaimer
Disclaimer