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What You Need to Know if You Are Considering Bankruptcy Because of COVID-19

Published May 28, 2020 by Amourgis & Associates
What You Need to Know if You Are Considering Bankruptcy Because of COVID-19

Nearly 22 million Americans have filed for unemployment due to the COVID-19 pandemic and the number of people out of work could continue to grow exponentially. Some economists estimate that the total number of Americans without a job could hit 47 million- which is about a 32% unemployment rate. We are saying this not to scare you, but to give you some perspective on how our nation is doing as a result of this pandemic. With so many out of work, many worry about their ability to pay rent, bills and groceries. We have been receiving many calls from people just like you who are unsure of their options and to see if filing for bankruptcy because of COVID-19 is the right choice.

What Are Your Options?

When you are in a financial crisis, it is important to understand what your options are. Whether you choose to make the minimum payments on your bills and try to remain afloat or negotiating a settlement with your lenders or filing for chapter 7 or for chapter 13 bankruptcy, we can help you determine the right way to proceed.

Bankruptcy shouldn’t be a shameful conclusion. For our clients, we like to show them the way to a fresh start. Whether due to COVID-19, medical expenses, loss of a job, divorce or another hardship, it can happen to anyone. Amourgis & Associates is here to help you with your financial planning.

Contact Your Lenders

If you are struggling to make your payments, give your lenders a call so they can work with you. Many are offering assistance programs and you may have options to defer your monthly payments. However, you do need to let them know of your situation so you can work with them. Most require you to let them know you will be late on payments.

Mortgage lenders are not able to proceed with foreclosures, either, so homeowners experiencing financial hardships can request up to 180 days of forbearance on their mortgages. Also, some of the banks and credit unions have set up hardship programs allowing you to defer credit cards, auto loans and student loans.

Do I Have to Repay My Bills?

Forbearance and deferment programs will only last so long, so it’s important to remember that you will have to repay your bills. Some lenders will require a full payment of all of your late payments at once. You can always ask for a lower interest rate on your credit cards, mortgage or car loans, but those are depending on your credit score and how interest rates are doing. So the short answer is yes- you should repay your bills. But if you are struggling to even make the minimum payments, you should know that bankruptcy is an option.

When Should I File for Bankruptcy?

Given the iffy times we find ourselves in, many wonder when is the right time for filing for bankruptcy. If you are able to wait a few months until things become more certain, you may want to hold off so any new debt you are incurring can be wiped out. However, if you are about to lose your home or just lost your job due to coronavirus and can’t make ends meet, you should call an Ohio bankruptcy attorney to get some direction.

There is a limit on how often you can file for bankruptcy, which is why we recommend getting some guidance before going any route. Our lawyers are able to help assess your financial situation and let you know if you should file now or postpone or consolidate your debt. We have decades of experience and are here to help you throughout the process.

Bankruptcy Can Be Your Fresh Start

If you can no longer afford to pay your bills and you have no other options, it may be time to consider filing for bankruptcy. Don’t look at it like you are a failure- for many people, it is the help that they need to get them back on their feet. That is what it is there for. Once your Ohio bankruptcy is discharged, you are completely debt free!

Though Chapter 13 bankruptcy can stay on your credit report for three years, and chapter 7 can take 7 years, it won’t prevent you from getting approved for credit. Creditors know that you are debt free and you won’t be able to file for another bankruptcy for several years. You will probably get many offers for credit after your bankruptcy is discharged.

Amourgis & Associates is here to help you determine if bankruptcy is your best option after COVID-19. Call, chat or email us today to schedule a free consultation to get started. Even if you aren’t ready to file now, we can help. Our offices are available 24 hours a day, 7 days a week. Let’s get through this together!

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