State Comptroller Peter Franchot has one piece of advice for people during the coronavirus pandemic: Call your creditors and ask for a four-month deferment.

“I encourage every Marylander and every small business to preserve what cash they have because you’re going to need it to protect your family and your ability to reopen your small business. Cash is king,” Franchot said. “Do not send it out of your pocket; keep it in your pocket, but make sure you communicate with the creditors.”

The coronavirus has already had huge impacts on the economy nationwide, including 3 million people filing for unemployment benefits this week and the Dow Jones industrial average plummeting record numbers of points.

And those effects are felt in Frederick County and Maryland, with 42,000 unemployment claims last week in the state, Franchot said. On average, the state receives only about 2,000 jobless claims per week.

He said that the state could see a 25 percent unemployment rate and a 25 percent decrease in tax revenue. While he’s not actively predicting those numbers, he does think they are possible.

Although Franchot said that he is concerned about the state, county and city budgets getting back on track, he’s more concerned about people who have bills to pay, and small-business owners. That is why he recommends that everyone ask for a four-month deferment on bills such as their mortgage or rent, health insurance premiums and credit card bills.

He believes that about 90 percent of creditors will be supportive and understanding.

“But I’m very confident from my conversations with business leaders around the state that the financial institutions are ready to be supportive of even the littlest guy who says, I’m 75 years old, I have [a] $1,000 rent bill, I have a $500 credit card bill, I’ve got a $200 utility bill, I’ve got [a] $100 insurance payment. That person should pick up the phone and call each of those creditors and make the ask.”

For the odd 10 percent of financial institutions that won’t be supportive, Franchot recommends calling his office or the state’s attorney to have the matter handled. He believes that everybody should have the option of having their bills deferred — even if they can afford to pay them.

“Wealthy people do this as a matter of habit. They don’t pay their bills when there’s an emergency. They get forbearance,” Franchot said. “So should everyone else. But you have to ask.”

While Franchot is supportive of the federal and state governments’ stimulus programs, he thinks that they are confusing and won’t be ready in time to meet Marylanders’ basic needs.

“If they can figure out the alphabet soup of federal and state agencies that supposedly have free money and grants and loans, have at it,” he said.

Deferments will help Marylanders keep the cash they have in the bank instead of spending and then waiting for a grant to come through, or for grant money that will then have to be repaid later.

“I don’t think small businesses need more debt right now,” Franchot said.

For many residents, the stock market is of increasing concern, especially for those who are looking toward retirement. Scott McCaskill, certified financial planner and owner of McCaskill Financial Planning, said that many of his clients are seeing the dip in the stock market reflected in their savings.

He suggests that they talk to their financial adviser, and if they do not have one, to sit down and take a look at all their investments and see which ones they can change.

“Now, I would never recommend someone just to cash out and walk away at a low point in the market, but it might make sense to take a look at your investment to see if it’s a good investment for you,” McCaskill said.

He said the stock market will recover, as it did after epidemics such as SARS in 2003. He and his employees have actually been planning for such a dip, as the market has been in a healthy state for the last 11 years and was expected to drop sometime anyway.

McCaskill has tried to diversify his clients’ portfolios by also investing in real estate, gold and bonds instead of just stocks. Franchot wants one piece of advice to stick with Marylanders: Save as much money as you can.

“I know it’s a little strange for a tax collector to say ‘don’t write checks,’ but that’s it,” Franchot said. “Look after yourself here, because it’s a tornado coming down the pike and it’s approaching Maryland. And we’re sadly going to have to muddle our way through.”

Follow Erika Riley on Twitter: @ej_riley.

(41) comments

StephanieQ

There was an article in the Frederick news post that suggested that Marylanders should contact their lending institutions to request 4 month deferments.

I thought I would post here what I have learned about 2 banks in an effort to perhaps save others the lengthy hold times to reach a bank representative

1. Suntrust/Truist is not offering any deferments. They are only offering forbearance and not for 4 months but for 3. At the end of the 3 months, the account must be brought current and the missed 3 months must be paid

2. M and T bank: they are not offering deferments nor forbearance. The only thing they are offering is suppressing late charges and no negative credit reporting only for the months of April and May

Hope this information is helpful to some who hold mortgages with those institutions.

StephanieQ

There was an article in the Frederick news post that suggested that Marylanders should contact their lending institutions to request 4 month deferments.

I thought I would post here what I have learned about 2 banks in an effort to perhaps save others the lengthy hold times to reach a bank representative

1. Suntrust/Truist is not offering any deferments. They are only offering forbearance and not for 4 months but for 3. At the end of the 3 months, the account must be brought current and the missed 3 months must be paid

2. M and T bank: they are not offering deferments nor forbearance. The only thing they are offering is suppressing late charges and no negative credit reporting only for the months of April and May

Hope this information is helpful to some who hold mortgages with those institutions.

joltinjoe

I think it would be a nice gesture and leading be example if Maryland suspends all taxes during any declared state of emergency.

MD1756

Dang. I should not have sent my taxes into the state. Maybe Peter will wait to cash the check, or give me a refund.

QOEPB

[angry] This is a very irresponsible plan of action! If everyone stops paying their bills the entire economic system will fall apart (except the government)!

If those folks who can afford to pay DO SO, then small business owners can survive AND afford to help those who can't make full payments currently. Mr. Franchot you should be ashamed of yourself for giving this advice that helps no one! Expect a call from my office tomorrow.

Comment deleted.
Brookhawk

Perhaps you haven't noticed what party is in the WH and controlled the Congress for some 8 years until 2018 and still controls the Senate. And thank goodness our Republican governor is not a Trumpist but seems to have a brain in his head.

Comment deleted.
DickD

Please explain the Great Depression, Great Recession and Trump's tax cuts that are going to make this recession worse.

Comment deleted.
Comment deleted.
sevenstones1000

I guess that’s why Rand Paul has coronavirus.

Crab0721

Not everyone has that option because some are in the middle of a loan modification and can't defer payments so that doesn't work and car insurance is going to renew so that doesn't work and people are buying everything so that you have to spend more money because you have to pay more for what you need because your brand is not in stock and it's not going to be available for a week or so. Why can't they just suspend all payments like other states have been trying to do or already have done for everything from commercial & residential properties as well as all bills from car insurance, to credit cards etc.

mgoose806

Very disappointed with this so called government leader. It should be state, if you can pay your bills, pay your bills. If you can pay some of your bills, pay some of your bills. Suggesting deferring for 4 months will just add to the pressure on the whole lending community.. Mortgage Companies have bills too.

DickD

Keep cash? What are you going to spend money on? If add are staying home, not going to work, you are not using gas. Restaurants are closed, movie theaters add are closed all major team sports are shut down and you can only go to grocery stores for food. Only those laid off from work have a problem to pay bills.

Yes, the stock market has bombed. Too late to do much about that. The best thing looking forward is to elect a Democrat to get us out of Donald Trump's Recession. Same as FDR was elected after Hoover, same as Obama was elected after George W. Bush.

The Grape of Wrath

I wonder if anyone sees a pattern. Three data points make a trend.

KR999

Donald Trump's Recession, Dick? And just how do you see that? Good Lord, your blind hatred of the man is so blind and juvenile it would be hilarious if it wasn't so sad, pitiful, and immature.

DickD

Facts are not hatred KR and that and the rest of Trump's cult fail to understand that. We don't hold hate rallies like your hero Trump who allows people to yell, "lock her up". We don't have rallies where candidates urge the audience to beat up a dissenter. Yes, there is hate - yours, not mine! I pray for you.

gabrielshorn2013

"The best thing looking forward is to elect a Democrat to get us out of Donald Trump's Recession.

Yep, des called it.

DickD

And you really think that Trump's tax cuts were good?

gabrielshorn2013

Where did I ever say that Dick? We should be paying down the debt during good times. We should also quit spending mere than we take in, and start cutting spending where it is not an official government function. We should only fund needs, and not wants, and we must be able to know the difference.

The Grape of Wrath

Any action to produce meaningful deferment has to come from the top, from the fed. People need to remember their lenders are borrowers too, so allowing you to defer simply leaves them holding the bag. Banks are never the ones holding the bag.

The Grape of Wrath

Financial institutions being what they are, they won't accommodate a penny of deferment. Tho them, "deferment" means principal only and you must continue paying interest. Your 30 year mortgage becomes 30.33 years. I've gotten phony baloney garbage letters from credit card issuers in the past telling me that due to my honorable and commendable behavior of making all my payments on time, I can "take a break" from my next payment or two. Of course the fine print indicates I will owe interest on the unpaid balance, and since no terms of the agreement are changed, I would pay interest on all the new purchases ad infinitum. A neat hook if you can get the fish to take it.

KR999

My house, car, and personal truck are all paid off and I have no credit card balances. My wife and I are still working with no interruptions so our money is going nowhere but into the bank.

Drgmtown62

Bless your heart. Thank you so much for the info. My day will be just a bit happier knowing this. You are an inspiration.

DickD

We know KRR is a compassionate person and will help others - don't we?

KR999

Yes Dick, just as we all know what a Trump hater you are, and how your repeated postings of your ancestor's military histories have helped us so much. Huh?

DickD

Jealousy will not get you anywhere, KRR.

KR999

You're more then welcome, Drgmtown62. Anything else I can do to make your day happier then you're able to make it yourself?

The Grape of Wrath

Sounds like you're ready for a cruise. Book your flight now, the airlines need the money. The Zaandam awaits you in Florida. The professional and dedicated staff is dying to make you sea voyage a pleasurable and memorable one.

marylandmirage

[lol]

bosco

Dick, I was going to use my Covid19 bailout checks for a cruise. Why don't you send me a check and I stick my bailout money in the bank? [beam]

KR999

Neither my wife nor I have ever had a desire to go on a cruise, FAUX-Principal. Why don't you take one and just not come back? I doubt that you'd be missed by anyone.

DickD

Too bad you don't like cruises, KRR, I was going to offer to pay for yours.

gabrielshorn2013

[beam] Take Dick up on his offer KR999! He neglected to put a time limit or price on the offer, so a month-long cruise on the best vessel, in their finest State Room suite in two years after this is all over, still complies with the terms of his offer! Not going to reneg now are you Dick?[innocent]

bosco

Why, bless your heart Principal.

sevenstones1000

KR - I don’t need the money either. Please - consider giving the money directly into the hands of those businesses that might not be able to stay open and whose employees are suffering. Keeping this bonus check circulating in the economy is more patriotic than saving it right now.

MD1756

In other words, State Comptroller Peter Franchot is off his rocker and is giving bad advice. Just Saturday I donated a substantial sum (between 4 and 5 digits to the left of the decimal point to an environmental organization I also do some volunteer work for. What ever happened to having enough savings to handle a loss of a job for 4 to 6 months? That used to be standard advice (or savings to last 1 month for each $10k in salary you wanted (probably a month for each $20k now) so if you wanted a $60k job you should expect it to take six months to find and have enough expenses to last that long). It seems people are no longer willing to save for potential future needs (and you should be able to save money almost no matter what your income level is by controlling expenses as needed (such as getting roommates even if you don't want them, etc.). Maybe they figure the government owes it to them to bails them out.

bosco

Same here KR999, except we plan to use our stimulus checks to book a cruise and help the crippled cruise industry. We've lived below our means for years, keep our cars/trucks for at least ten years, and have saved for our retirement. We don't spend money we don't have buying things we don't need to impress people we don't know.

And we wash our hands instead of depending on dust masks and rubber gloves to keep us virus free.

newspostreader

This article is confusing. So he is recommending that even if you are very fortunate to not have been impacted by this at this time, that you could defer payments? If you're still doing okay, and expect that will continue to be the case, why would you not pay your bills? I think you should let those exceptions for the people who really need help right now.

sevenstones1000

newspostreader: I haven’t been financially impacted by this catastrophe - I always keep two to three years of living expenses (beyond my social security payments) in cash or near cash, so I can just wait out the market recovery before even thinking about selling investments.

What I plan to do with my $1200 is to divide it up into envelopes of $100 in cash and give an envelope to my hairdresser, my nail salon, my massage therapist, the coffee shop that makes my latte, the cupcake shop that makes my occasional treat, and the managers of a couple of restaurants we love, to be divided among the staff at the manager’s discretion. I invite others, as they are able, to join me in getting this payment directly into the hands of those on the front line of the economic collapse. Also - don’t forget your minister’s discretionary fund, those of you with a church home. This allows the minister to help out those in true emergency need.

DickD

God Bless.

gabrielshorn2013

[thumbup][thumbup][thumbup] seven!

MD1756

[thumbup]

francesca_easa

Glad we have Franchot as our comptroller. Would love to see him as governor one day.

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