Borrowers skipping loan and credit-card payments without penalty could soon face a rude awakening

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The financial effects of the coronavirus pandemic may get a lot worse 120 days after the national emergency is officially over. The $2.2 trillion coronavirus stimulus package, known as the CARES Act, recognizes the financial difficulties many Americans are facing, requiring lenders who enter into an agreement with borrowers to delay payments or lower minimum monthly payments to report their accounts as current.

As a result of this agreement, their credit scores won’t be lowered, if they didn’t have any preexisting delinquencies. That would make it easier for these consumers to secure a loan or mortgage in the short and medium term. However, 120 days after the national emergency is terminated they might have a rude awakening from their credit-card company or lender, experts say.

After that period of time, the lender could demand full repayment from the borrower or credit-card holder and, if they’re unable to repay, their credit scores could nose-dive, said John Ulzheimer, credit expert and president of the Ulzheimer Group in Atlanta. That would make it harder or more expensive for them to get a loan, take out a mortgage or even get a new job, he said.