We, as a society, have been face to face with an unexpected threat to our physical health and financial wellbeing. The media has been helpful in promoting ways on how we can protect our health. Wearing masks, washing our hands, and practicing social distancing has been heavily emphasised; however, there has been very little written about the financial hardship that millions of Americans have felt because of curfews, cancellations, job-cuts, layoffs, quarantines, shut downs, and business closures.
Before we answer whether or not it is possible to file for bankruptcy because of the coronavirus, please consider this list of suggestions.
Helpful Suggestions For Those Affected by the Coronavirus
Review Your Budget – Whenever there is an interruption in income, it is very important to take a moment to adjust your spending. Your priorities should revolve around meeting your living expenses and health needs. Mortgage or rent payments are a priority and should come first.
Talk with Your Lender/ Creditors – If you cannot make payments on your rent, mortgage, utilities, credit cards, or other debt because of coronavirus, call your creditors and explain the situation. Request some kind of relief, and get their offer in writing. As a bankruptcy lawyer, we can tell you that you are not alone. Many lenders, credit card companies, and utility companies are offering special coronavirus programs to alleviate financial distress.
Review Your State and Federal Assistance Programs – Over the last few months, there have been many different introductions of relief programs and assistance. As long as this crisis continues, there will be new programs being made available to Americans. We would encourage you to monitor and review all programs and seek any available assistance that you might need.
Don’t Take on Any Debt – You may have to rely on your credit cards during this financial crisis; however, it is advisable that you don’t take on any high interest cards, stay away from title loans, and avoid taking on too much debt.
Don’t Turn to Your Retirement – Many people tend to dip into their retirement to pay off their debt. Retirement funds are usually beyond the reach of a creditor, so you should leave this money alone. If you are at a point in which you are considering using your retirement to pay off debts, you might want to consider bankruptcy.
Consider Filing for Bankruptcy – There is relief for debt garnered from the coronavirus. Although it is impossible to say how long this virus will last, or what the future holds, we believe this will pass. If you have fallen behind on your mortgage or debt, and your lender or creditors are not working with you, a bankruptcy lawyer might recommend that you file for Chapter 7 or Chapter 13 bankruptcy. The bankruptcy laws within the Bankruptcy Code are intended to give debtors a fresh start.