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FINANCIAL IMPACT OF COVID-19–Evaluate Your Finances and Plan Ahead

11/03/2020

FINANCIAL IMPACT OF COVID-19–Evaluate Your Finances and Plan Ahead

So far 2020 has not seen a surge of personal consumer bankruptcies. In fact, total bankruptcy filings year to date has been lower than 2019. Unfortunately, the tidal wave of bankruptcies anticipated in 2021 could set record highs. This may be because federal stimulus payments, mandated mortgage, loan forbearance, unemployment insurance enhancement and other additional support provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act are set to expire unless extended for 2021.  

“Uncertain Times” has been a hallmark statement during this Covid-19 pandemic and with that in mind, it is important for all of us to keep in mind the forecasts about bankruptcy filings. No one wants to file for bankruptcy, but if you are one of millions laid off because of the pandemic, then it makes sense—especially if you are struggling with debt repayment. Stimulus plans help, but truth is that for many, it only offers short term assistance.

It is important to evaluate your finances, budget, and debt now and plan ahead. With planning, you can develop a solution that will allow you to maintain control over your finances, while still leaving an option for debt relief through a bankruptcy. The key in planning will be maintaining payment requirements for debts. There are several state programs that have put a stop to evictions temporarily due to the pandemic, but when these programs expire, the legal obligation to pay the missed rent will still be there. The same applies to other federal programs that have temporarily suspended foreclosures or debt repayment.

It is also important to note what portion of a debt payment is going to the balance owed verses interest or late fees. In planning ahead, you will also have to consider what your monthly disposable income will be once all payments for necessities have been made. To do this you will need to calculate how much extra cash that you will have after you have paid rent/mortgage, car payment, utilities, food/gas, and insurance. Evaluating this will allow you to have a better idea whether you will be able to make the minimum payments required by your other debts over a period of time.

Our bankruptcy attorneys at Patel Law PLC can sit down with you and help you evaluate your financial situation and discuss whether filing for a Chapter 7 bankruptcy or Chapter 13 bankruptcy is right for you.

Contact Patel Law PLC for a free consultation. We are offering REMOTE COVID-19 consults.

Call (602) 266-2169 or visit us at: www.patellawaz.com

Our attorneys at Patel Law PLC can sit down with you to help you come up with a plan for debt relief, whether it is helping you prioritize the payment of your debt or seeing if you might benefit from a Chapter 7 Bankruptcy.

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