How Bankruptcy Can Help You Through Covid

Skyrocketing cases of Covid-19 in the South and West are slowing our economic recovery, causing continued financial hardship to many Americans. Extra federal unemployment, PPP loans and stimulus checks have softened the blow, but it’s not clear what help can be expected going forward. State and federal moratoriums on evictions and foreclosures are expiring, leaving people that can’t pay their back rent vulnerable to losing their homes. If you’re anxious about your financial future due to Covid-19, it’s a good idea to speak to an experienced bankruptcy lawyer to discuss how filing for Bankruptcy can help you.

Chapter 7 Bankruptcy Can Wipe Out Your Debt

If your income and assets are not substantial, you could qualify for Chapter 7 bankruptcy. In most cases qualifying individuals are able to keep their exempt property, such as their home and their car, while completely dispensing with their medical, credit card, payday loans, personal loans as well as some types of back taxes and traffic tickets. As soon as you file for Chapter 7 bankruptcy, all collection actions against you are “stayed,” and actions such as garnishment of wages end. If a foreclosure or eviction is underway, filing can delay these proceedings, giving you more time to come up with money or find a new place to live. Chapter 7 bankruptcy can completely eliminate your debt, giving you a fresh start financially.

Chapter 13 Bankruptcy Develops An Affordable Payment Plan

If you have a substantial amount of income, but it’s not enough to get on top of your mounting debt for unpaid rent, unpaid mortgages, car loans, lease payments, credit cards or back taxes, Chapter 13 can help you develop an affordable payment plan. Chapter 13 is not simply a debt consolidation plan where creditors are asked to take less than you owe. Once your petition is accepted by the federal bankruptcy court, your creditors are obligated to accept the decision, even if it’s just pennies on the dollar.

The best way to find out if bankruptcy can help you through Covid is to speak to an experienced bankruptcy attorney. If you are losing sleep worrying about escalating debt, you should arrange for a consultation as soon as possible to discuss your options.