COVID-19 Relief may not be coming, bankruptcy is an option to take

An article for a newspaper

COVID-19 Relief may not be coming, bankruptcy is an option to take

December 28, 2020   Cueball

by Morrigan Jonsdottir, special to Sumner Newscow �" If you are in serious financial trouble because of  COVID-19, and worried that little or no relief will be forthcoming from the U.S. Government, you can probably stave off eviction, home foreclosure, mortgage payments, car repossession, and bill collectors by filing a Chapter 7 or a Chapter 13 bankruptcy.

Everything except student loan payments will “stay” the day you file paperwork. A stay of proceedings is a ruling by the court in civil and criminal procedures, halting further legal process in a trial and other legal proceedings.

Credit card payments, car payments, mortgage payments, rent and medical bills will all be stayed. Your car will not be repossessed, your home will not be foreclosed upon, you will not be evicted from your apartment. This stay will remain in place from the time of filing until your hearing �" where your debts will be dealt with.

With the COVID crises, many courts are overwhelmed with these bankruptcy cases, so your hearing might not take place for months. And, as said above, all debt payments, and all actions on debt, including actions by the IRS, will be stayed during this period. (Remember, student loans are excluded from this, but there are other ways to manage student debt, which your bankruptcy attorney can help you with.)

At the hearing, unsecured debt such as credit cards and medical bills are usually just discharged. Mortgages, and sometimes auto loans, can often be restructured into something you can afford under your current circumstances. Only student loan debt is carried through without change.

Chapter 7 and Chapter 13 offer different advantages and disadvantages, and the qualifications are different for each. Chapter 7 bankruptcy, also known as liquidation, is a legal option that can help you clear some or all of your debt. Chapter 13 bankruptcy is also a legal option that can help you get some debt discharged but allows you to keep your property and repay your debt by completing a three-to-five-year repayment plan.

Attorneys fees are usually more for a Chapter 13. Your bankruptcy attorney can help you select which one is right for you. Everyone’s circumstances are different.

Most bankruptcy attorneys offer a free initial consultation to explain the process and what it can and cannot do for you. If the first bankruptcy attorney you contact does not offer such a free consultation, contact another.

If you are headed for a financial crash, don’t wait until you are absolutely at the end of your rope to contact an attorney. Many near destitute and desperate people pay the attorneys fees for their Chapter 7 by simply not paying their bills for a month or two, and then filing before any serious collection action takes place �" but be absolutely sure to consult with your attorney in the free initial consultation before taking this step. Don’t try it on your own.

Finally, a clean bankruptcy isn’t the hit to your credit that most people imagine. There is a whole industry to help you rebuild your credit. What really destroys your credit is when multiple creditors put multiple dings on your record when you are tapped out. But ask your attorney about this, they should have the most current information.

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Editor’s note �" Jonsdottir practiced law in a low-income divorce clinic in Santa Barbara, Calif. and with the Southern California Indian Center helping low-income with no-fault divorces. 

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Reviews

[Coyote Poetry]

Many will need. Even the $2,000 dollars will help the jobless little. I am lucky. I work as a Pharmacy manager and my wife work in a factory that make items for the hospitals. It will get worst before it become better. Hello my friend and happy New year.
Coyote