The COVID-19 pandemic has wreaked havoc on all aspects of our lives. For many, the slowing economy has meant the loss of jobs and livelihood. Few Americans have enough savings to last more than a couple of months. If you are struggling with your finances with no sign of relief, you may be wondering whether you should file bankruptcy. Bankruptcy is an option for those who have extensive debts. There are some things to consider if you are thinking about whether bankruptcy is a good choice in your situation.
Is Bankruptcy an Option?
Bankruptcy is an option for those who have a lot of debt that they are not able to repay. There are two types of bankruptcy including Chapter 7 and Chapter 13. Chapter 7 allows you to liquidate your assets to repay and resolve debts while Chapter 13 gives you the opportunity to consolidate your debts and repay them under a payment arrangement. Both types of bankruptcy will immediately stop creditors from harassing you for payment and will ultimately give you a fresh start. However, if you are likely still facing debt that you cannot repay, you may not be ready to file bankruptcy yet.
Changes to Bankruptcy Rules
The federal Coronavirus Aid, Relief, and Economic Security Act (CARES), provides some temporary rule changes to bankruptcy. One of the modifications allows for the extension of the Chapter 13 repayment plan. Those who have suffered a material financial hardship due to COVID-19 can request a hearing to extend their repayment plan. Those who file bankruptcy do not need to include their stimulus payments as reported income under Chapter 7, and the stimulus money will not be included as disposable income for those seeking Chapter 13.
Also, bankruptcy courts have made changes to their operation during the pandemic. While typically, a bankruptcy attorney would have had to obtain a signature in person from the person filing, some courts now allow virtual signatures on bankruptcy paperwork. In addition, a meeting of creditors may now be conducted remotely in some instances. Your bankruptcy attorney will give you guidance on these changes and keep you up to date. The changes in the CARES Act will remain in effect until March 27, 2021.
Help from an Experienced Bankruptcy Attorney
Every situation is different and each case is unique. While bankruptcy may be the best solution for some people, for others it may not be the ideal option. If you are drowning in financial debt, do not despair. There are some ways to end the stress and pressure, including filing bankruptcy. Gather your financial information and schedule a meeting with a skilled bankruptcy attorney. Your lawyer will review the details of your case and provide you with alternatives so you can make the best decision for you and your family.
At Moen Sheehan Meyer, Ltd., we offer comprehensive, compassionate legal support for those seeking bankruptcy. We provide virtual meetings when possible and are happy to assist you with answers to your important questions. Contact Moen Sheehan Meyer, Ltd. online or call us at (608) 784-8310 for a free initial consultation.