Can You File for Bankruptcy if You Lost Your Income During the COVID-19 Pandemic?
The COVID-19 pandemic has been hard on many of us. Due to shutdowns, many people were out of work and even lost their jobs with no way to find a new one or know if they will get their job back when everything opens back up. This uncertainty about where you’ll get the money to pay your bills is stressful and can lead to you exploring your options. While the stimulus checks provided some relief, for most people, they didn’t provide enough.
Because of that, one of the options you might be considering to get back on your feet is filing for bankruptcy. Even though this leaves a mark on your financial record, you could think it’s the only option you have to get your finances back in order after losing your income.
Let’s take a look at filing for bankruptcy, and how it might be a viable option after losing your income because of the COVID-19 pandemic.
Financial Relief from the CARES Act
As mentioned above, the Coronavirus, Aid Relief and Economic Security Act (the CARES Act) was created to provide financial relief to Americans as the country went through shut-downs, heightened infection rates, and hundreds of thousands of deaths from the novel coronavirus. While these payments have helped in some respects, they also haven’t supplied enough to those who have lost their jobs and been unable to secure unemployment.
Many Americans were left to file for unemployment, but because of the influx of applications, the office was having trouble processing them all quickly. Then people were trying to call the offices to get an answer about their application because they needed money to pay their bills, but since the offices were flooded with calls, it was hard to get anyone to pick up.
This left many people without unemployment paychecks even though they needed the money to pay for rent, groceries, and other everyday costs that people and families need to pay to live. People who had already filed for bankruptcy or foreclosure have extended deadlines for payments. Creditors aren’t allowed to garnish the stimulus checks from debtors, which helps Americans use the checks for their essentials.
Even though those checks can’t be taken away by creditors, that doesn’t mean they’re enough to help you get by. So you might be left thinking that bankruptcy is your only option.
Should You File for Bankruptcy?
In short, the answer if you can file for bankruptcy after losing your income because of the COVID-19 pandemic is yes. You can file for bankruptcy. In fact, so many people are choosing to file that bankruptcy attorneys are working overtime and getting calls on nights and weekends, according to an article from CNBC. Even though it is a viable option, it shouldn’t be your first.
At first, you should contact all of your lenders to discuss payment options. Many business and loan lenders will work with you to create a plan for repayment because they understand that the Stay-at-Home orders harmed the paychecks of many people. This can help keep you from making the big decision of filing for bankruptcy.
However, if you’ve exhausted all of your other options, filing for bankruptcy could be the only lifeline you have left. Your best course of action will be to talk with a bankruptcy lawyer so that they can answer all of your questions and ensure you file for the correct type of claim. You might have to go through the process and meetings through Zoom or other methods to ensure social distancing.
However, with the shutdowns and other COVID-related hold-ups, your application might not be processed until after Stay-at-Home orders are lifted. This could mean that you regain employment before your application is actually filed. If you still want to go through with filing for bankruptcy once everything opens back up, then you could use the help of an attorney.
Belsky & Horowitz, LLC Will Guide You
Struggling financially from the COVID-19 pandemic is an experience many people have faced, and it’s something you don’t have to go through alone. At Belsky & Horowitz, LLC, we know you’re trying to provide for your family and ensure all of your bills are paid. But when you get laid off from the pandemic, you might feel like you’re out of options.
With the help of our Baltimore bankruptcy lawyer, you can have peace of mind knowing you’re taking the necessary steps to get your life back on track. Reach out to our office today so that we can start discussing your options, deciding what will work best for you, and starting the application process as soon as possible.
