RPT-YOUR MONEY-Car totaled? No power? Should you pay your bills?

Fri Nov 9, 2012 7:59am EST

By Beth Pinsker Gladstone

NEW YORK Nov 8 (Reuters) - Superstorm Sandy hit the U.S. Northeast just before the first of the month, when rent and mortgage payments typically come due, not to mention cable, phone and utility bills.

More than 8 million people lost power and 1 million or so were evacuated from their homes. Some 40,000 are still displaced. Meanwhile, the storm's impact destroyed 250,000 cars. So now what are these folks supposed to do about their bills? Adding to the misery, an unseasonably early winter snowstorm on Wednesday in the U.S. Northeast knocked out power to more customers, following those who had lost power because of Sandy.

Here are the answers to key consumer questions:

Q: Superstorm Sandy disrupted everything, and I need more time to sort out my finances. How long do I have to make my mortgage payment?

A: Many lenders are waiving late fees, so you have a little time if you live in New Jersey, New York or Connecticut. Wells Fargo & Co, the largest residential mortgage lender, says it is waiving late fees until the end of November. The company will give additional accommodation to customers who were directly affected on a case-by-case basis.

Q: Should I make payments even if my house or car (or both) are totaled?

A: Yes, at least until the issue is settled with the insurance company and the bank. "Even if there's not a house, you still own the property," said Jeanne Salvatore, senior vice president of the Insurance Information Institute, a trade group for the industry. Talk to your lender and your insurance company to work it out. Do not wait. Failure to make payments will hurt your credit score.

Q: Do I have to pay rent if I am not living in my apartment?

A: The general rule of thumb is you do not have to pay for days you are not living in your apartment because it is uninhabitable. Most landlords in New York seem to be cooperative about this in the wake of Sandy, said Edward Josephson, an attorney for Legal Services NYC. "Landlords don't want to be taking people to court for Sandy rent."

Beware, though, if your landlord offers to move you to an apartment in another building. "Get something in writing that says you have the right to come back," Josephson says. Do not pay more in rent than you are paying now. The big danger in this is if your landlord moves you from a rent-regulated apartment to one that is not and then tries to get out of offering you the same protections.

If you stayed in your apartment without power or other amenities, you may choose to pay no rent. Josephson said this risks litigation. His advice? Ask for a rent reduction instead.

Q: Do I have to pay my utilities?

The quick answer is no. Cable companies and utilities are not charging for the days that your dwelling was without service. And several cell phone carriers, such as Verizon Communications Inc and AT&T Inc, are offering similar waivers. Time Warner Cable Inc says if you get charged for days you did not have power, call and ask for a credit to your cable.

Q: I rent. Can I break my lease and move elsewhere?

A: It can't hurt to ask. In New York City's Financial District, many of the large apartment complexes will be out of commission for a long time. Real estate broker Sean Christie says management companies are either moving tenants to other buildings they own, or are letting tenants out of their leases. But you need to factor in the added expense of moving.

You will likely sacrifice your security deposit for several months until your landlord gets up to speed, Christie calculates. Then there is the cost of movers, the first month's rent and security on another apartment and a one-month broker's fee, if it is not paid by the new landlord.

Christie said none of his clients have mentioned renter's insurance to cover these particular costs. "It really is tough," he said.

Renter's insurance would likely cover only temporary costs for alternative housing. "The coverage is for additional living expenses," Salvatore emphasized. It usually does not cover your primary rent or mortgage.

Q: Is there any help for lost wages?

A: For those who missed work in the days after the storm, disaster unemployment insurance is available. But it is only for self-employed people who are not otherwise receiving unemployment benefits. It lasts for up to 27 weeks, beginning Oct. 29, 2012. Applications are due by Dec. 3.

Based on other disasters such as Hurricane Katrina and the Sept. 11 attacks, it might make sense to hire an advocate to aid with the complicated application process, said Cathy Ruckelshaus, legal co-director of the National Employment Law Project.

Expect to provide documentation of past income, and be ready to explain other particulars of your situation.

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