Think twice before deferring your debt, bill payments during COVID-19 crisis - InfoNews

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Think twice before deferring your debt, bill payments during COVID-19 crisis

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March 27, 2020 - 8:00 AM

Banks, utility companies and ICBC have announced options to defer payments because of the COVID-19 pandemic, and while it may be essential for those who have lost their jobs and are struggling to put food on the table, a financial expert warns it's not for everyone.

“If people have the financial ability to continue to make all their monthly bill payments - their debt payments, the mortgage, the car payments, the utilities etc. - my recommendation is that they should continue to make those payments if they’re actually able to do it,” Robert Hunt, managing partner for Grant Thornton Ltd.’s consumer insolvency business unit, told iNFOnews.ca today, March 26.

“I think what’s going to happen is this crisis will end and people are then going to have to deal with their debts. In the case of the deferral of mortgage payments, people are still going to have to make their mortgage payments in due time and interest will continue to accrue on mortgages.”

Taking a few months off from paying the mortgage and socking the money away in a vacation fund, for example, may end up forcing homeowners to just put that money back into mortgage payments.

While details of just how banks will assist in deferrals are not clear, Hunt expects the interest will continue to compound and will have to be paid in the future.

Even if the house is sold next year, for example, the bank will likely get its full payment.

The same goes for utilities that may charge interest on any deferrals.

So, he recommended, only seek payment deferrals if absolutely necessary.

Here are some of the deferrals on offer as of March 26:

ICBC

Those making monthly insurance payments can now defer those payments for up 90 days without penalty. The old rule was 30 days. They can call 1-800-665-6442 or go online here.

People can now extend their driver’s licences by calling 1-800-950-1498. They will be mailed a temporary licence good for up to 90 days. They can do that any time during the six weeks before they expire.

For information on other online options at ICBC go here.

B.C. HYDRO

For people having trouble paying their electrical bills, B.C. Hydro offers a Customer Assistance Program for residential and commercial customers. Call 1-800-224-9376. There is also a Customer Crisis Fund that may provide grants of up to $600.

FORTIS B.C.

There are two divisions at Fortis B.C. that can help customers facing financial difficulty for any reason and will try to tailor solutions on an individual basis. Call 1-866-436-7847 for electricity related inquiries and 1-888-224-2710 for natural gas.

BANKS

Last week, Canada’s six biggest banks announced they were willing to help on an individual basis with mortgage deferrals of up to six months and other credit relief.

Interior Savings Credit Union mentions a similar six month offer on its website but some other credit unions aren’t that specific.

For information about government assistance programs go here.


To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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