Is Bankruptcy the Right Move During the Pandemic?

Over the past year, the COVID-19 global pandemic has affected billions of people around the world. Many of these people have lost their jobs and have faced being evicted or having their home foreclosed upon. This has led many people to wonder if it’s time to declare bankruptcy. However, before you do, there are a few things you should keep in mind.

There Is Help Available

The CARES Act has provided a number of benefits to those in need, including three (as of March 2021) stimulus payments. It has frozen evictions, and many utilities have extended the cut-off period and are working with people to make payment arrangements. Those who own their own businesses have had the option of applying for grants and loans through the Small Business Administration, and unemployment benefits have been increased for those who are employed by others. Many student loan payments have also been put on hold.

All of these options can help you avoid bankruptcy. Even if you have other debt, you may be able to work something out with your creditors. Many credit card companies and banks, for example, have been more than willing to work out payment arrangements.

Should You File for Bankruptcy if You Can’t Get Help?

Bankruptcy is still a valuable tool when used for the right reasons and at the right time. If you understand how bankruptcy can help you and how the specific chapter of bankruptcy you’re considering works, it can help you restructure or eliminate debt so you can get out of your financial black hole.

However, while courts have been open and are working through cases as quickly as they can, some districts may still be backed up. That’s because courts were closed during the early phases of the pandemic. Some have also had to close temporarily due to employees or even judges coming into the building with COVID. This has delayed many cases. Moving to virtual court sessions has helped, but this has presented its own challenges. All of this means that you may not be able to get your bankruptcy hearing scheduled for as soon as you would like it, so do keep that in mind. Delays are inevitable in even the best of times, but right now, they are happening more often than not.

Do you need help determining if bankruptcy is right for you or navigating the court process? Michael F. Kanzer & Associates can help. Contact us today to set up a free consultation.

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