We have the most up to date information for individuals to navigate this critical decision regarding the Coronavirus pandemic. According to Alex Gaily, a financial reporter;
The novel coronavirus impacts all aspects of our daily lives, from social distancing to unemployment, as people worldwide try to figure out their “new normal” and their finances along with it. Amid financial uncertainty due to COVID-19, you may be considering filing for bankruptcy.
From June 30, 2018, to June 30, 2019, there were nearly 500,000 Chapter 7 bankruptcy filings in America, significantly less following the Great Recession. From 2009-2012, there were over 1 million Chapter 7 filings.
Recent statistics say filings have declined extensively since the market crash of 2008, but he expects them to increase due to pandemic-driven unemployment.
We have launched a COVID-19 and bankruptcy FAQ page on our Blog page.
How the COVID-19 CARES Act affects bankruptcy
Congress recently passed the CARES Act relief package, a roughly $2 trillion coronavirus response bill intended to keep the economy afloat and provide financial relief to Americans across the nation. The new legislation instituted some significant changes that affect those considering filing for bankruptcy or anyone who has already filed.
Suppose you’re receiving government relief payments during the COVID-19 pandemic. In that case, it cannot be turned over to bankruptcy trustees, and it will not affect your income reported on Chapter 7 or Chapter 13 filing. According to the statistics, the new legislation also allows those who file for Chapter 13 bankruptcy to adjust their plans if they’re experiencing hardship due to the virus.
The Law Offices of Robert M. Geller, P.A. says the bankruptcy process will likely slow down due to COVID-19.
“Despite the delays, you should remain aware of all deadlines associated with your case, including when filing fees and paperwork are due,” according to the report. “Due dates for submitting proof of bankruptcy education and other deadlines haven’t changed.”
Should I file for bankruptcy?
While everyone’s circumstances are different, most people shouldn’t file bankruptcy until they’ve reached the lowest point of their financial situation. You may be in the process of deciding whether to file for bankruptcy because of how the pandemic has affected your financial situation, but keep in mind that it should always be the last resort.
Bankruptcy courts are closed for in-person visits, but filing bankruptcy over the phone is still an option during the outbreak. However, there are many things to consider beforehand, such as whether your financial situation will get better with government relief and the impact it can have on your credit.
If you wonder if you should wait to file or if relief payments will be enough to prevent bankruptcy, the answer depends on your situation. The best course of action is to speak to a financial professional or use a free bankruptcy platform like Upsolve to determine what to do next.
“If you’re in so much debt that you’ll never be able to pay it back, then you should likely file for bankruptcy,” Pavuluri said.
What if I can’t afford to file for bankruptcy due to COVID-19?
There are usually high costs associated with filing for bankruptcy — mostly due to lawyer’s fees — but a free tool like Upsolve can be an alternative solution for those financially impacted by COVID-19. To date, Upsolve has relieved over $200 million in debt.
In most states, you can file your bankruptcy paperwork electronically if you have a lawyer.
Although the outbreak is financially impacting individuals and businesses, people should not panic and file for bankruptcy without seriously analyzing their financial situation.
If you have questions related to filing bankruptcy please call our office at (804) 225-9500 or Contact Us via email.