WE are facing challenging times brought about by the coronavirus. Since March of last year, millions of people have lost their jobs. A lot of business owners have been forced to shut down. Surprisingly, bankruptcy filings have been down with so many people still waiting to see what happens in the next several months. Unfortunately, however, as a bankruptcy attorney, I predict that this is only temporary, and it is just a matter of time before people realize that bankruptcy is their only option. This may sound pessimistic but I think it is much better to be prepared than not.
At this time, a lot of people are still getting unemployment although for a lot of them, this temporary help has either just ended recently or is about to end. The government has been effective in extending unemployment benefits and we are now on round 3 of the stimulus payments. Eviction and foreclosure moratoriums are still in effect in a lot of states and so landlords and mortgage lenders are just waiting until they end before taking legal action. I talk to a lot of people who have not paid their rent or their mortgage since last year. A lot of them are still on forbearance, waiting to see what their mortgage lender would do for them so that they don’t lose their home. There is a lot of uncertainty in people’s minds about how and when they will be able to catch up on their bills.
A lot of people I talk to everyday are afraid of bankruptcy, and they have a lot of questions or concerns about how this will affect their credit in the long run. Many of them are embarrassed to even talk about it. I explain to them that although filing bankruptcy may affect their credit for 2-3 years, it is not difficult to rebuild their credit, and it actually seems like a small price to pay considering the fact that it may be their only solution if they are buried under a mountain of debt.
It makes me sad when I see people who have gone through all their savings, emergency funds and even their retirement plans, only to realize in the end that they still need to file bankruptcy after putting it off for a long time. In most cases, those assets would have been protected in bankruptcy and they could have filed earlier and not lose what little they had.
No one wants to file bankruptcy. But if you’ve lost your income in the last 12 months due to the coronavirus, bankruptcy might make sense if you are struggling with debt. While some people may still be getting unemployment at this time, it is unlikely that this will be enough to keep them afloat if the effects of the pandemic last longer than expected. So, in my opinion, while bankruptcy should be a last resort, it would be wise to have a plan for the coming months. In other words, “Hope for the best but still be prepared for the worst”, just in case.
I have found that bankruptcy is often caused by things beyond your control- such as the reality that people are facing now. The virus has literally changed our world in such a short period of time and the financial damage it has caused millions of workers and business owners is unprecedented. We may not know that actual damages until years from now when the dust has settled. If filing bankruptcy is inevitable for you, it might be your best course of action if you cannot see a clear financial pathway for you to get a fresh start. And that’s exactly what bankruptcy is for- to get you out of the financial fog that you may currently find yourself in. You may be feeling lost with no sense of direction about where you are going. Getting out of the fog gives you a clearer picture of your financial situation and a vision for the future.
If you can no longer afford to pay your bills, seek legal counsel to know what your options are. And if you have assets such as a home, business, savings or other personal assets, you certainly want to know how you can protect what you’ve worked so hard for in case you do need to file bankruptcy. But the planning should happen now, not later. Don’t make the same mistakes that most people make- waiting until the last minute. If you do, you may find that you have fewer options because you could be making decisions under severe time constraints and tremendous pressure to quickly protect what you have.
For a free consultation and debt analysis, call Toll-Free 1-866-477-7772.
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NOTE: Due to COVID-19 concerns, I am offering free consultations BY PHONE OR VIDEO to anyone who needs help in dealing with their debt problems.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 5,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call RJB Law Offices at TOLL FREE 1-866-477-7772.