Handling Financial Strain During the COVID-19 Pandemic
Struggling with debt under any circumstances is stressful enough, but going through financial hardships during a pandemic with existing financial strains can only make it that much harder. If you are concerned about your financial situation and don’t know what to do about resolving your debt during this challenging time, bankruptcy could be a viable option to get back on your feet. Here’s what you need to know.
Bankruptcy & The CARES Act
The CARES Act (Coronavirus Aid, Relief, and Economic Security Act), was passed and signed into law on March 27, 2020. The purpose of this act is to deliver economic relief to the American people to protect public health and the economic impact of COVID-19. Under the CARES Act, certain temporary provisions were made to bankruptcy laws to protect those who are already in bankruptcy proceedings or are going to be filing bankruptcy amid the pandemic. Here are some benefits of this provision:
- Many Americans will receive or have already received a one-time economic stimulus payment.
- Stimulus payments will be excluded in the monthly income calculation when determining a debtor’s eligibility for Chapter 7 bankruptcy filings.
- Stimulus payments will be excluded when determining a debtor’s disposable income in Chapter 13 bankruptcy filings.
- Chapter 13 debtors who are already under a bankruptcy reorganization plan as of March 27, 2020, may be able to extend their plan for up to seven years from when their first payment was due. To qualify for this extension, you must show that you suffered material financial hardship due to the COVID-19 pandemic either directly or indirectly.
The changes to Chapter 7 and Chapter 13 bankruptcy code will expire on March 21, 2021. Consulting an experienced bankruptcy attorney can help determine your eligibility in filing for bankruptcy and avoid any missed deadlines.
Is Bankruptcy Right for You?
Bankruptcy may the right option for you if:
- You have credit card debt
- You have medical debt
- You are having trouble paying personal loans
- You are being threatened with foreclosure
- You have tax debt
- You want to have the option to pay tax debts or other debts through a repayment plan.
There are two common types of consumer bankruptcy — Chapter 13 and Chapter 7. Contact an experienced bankruptcy attorney to determine which option will be best to handle your specific financial situation.
Learn if Bankruptcy Is Right For You
The good news is that bankruptcy courts are still hearing cases during the COVID-19 pandemic. If you are having difficulty making ends meet, filing for bankruptcy could be the answer to your financial burdens so you can get a fresh start.
If you are struggling with mounting debt during this difficult time, we can help you. Contact SM Law Group, APC today at (818) 805-1758 for a free consultation and learn how you can be protected under bankruptcy laws.