You Have the Choice to Take Back Control of Your Financial Future.

Signs That It’s Time to Consider Personal Bankruptcy During the Covid-19 Pandemic

If you were having difficulty paying your bills during the first two months of 2020, things may have improved thanks to the government benefits provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The bill, which was signed into law on March 27, expands states’ ability to provide unemployment insurance for many workers impacted by the COVID-19 pandemic, including for workers who are not ordinarily eligible for unemployment benefits, such as contract workers and freelancers. 

However, it remains to be seen how long these benefits will last. If your income has been reduced or you have been laid off, you are probably wondering what will happen when this money runs out. How will your bills be paid? What happens when the federal eviction moratorium ends? How much more debt can you take on before the cycle of debt becomes unmanageable? 

If you are struggling with these questions, you’re not alone.  Dealing with the uncertainty of the coronavirus pandemic is particularly challenging for those who need to file for bankruptcy. Filing for bankruptcy is a complicated process and a decision that should not be taken lightly. But for some, it is the only solution that will get them out of debt and regain control of their finances. So how do you know if filing for bankruptcy is right for you?

You are being sued by debt collectors.  If you are unable to make payments on your debt, oftentimes the debt will be turned over to a collection agency.  If collection attempts continue to go unanswered, a lawsuit will likely be filed against you. It is best to not let it get to this point. Filing for bankruptcy provides legal protection against creditors and debt collectors.  Once the automatic stay goes into effect, it bars any additional collection attempts, including lawsuits being filed against you.

Your credit cards are maxed out.  This not only negatively affects your credit score, but you are likely trapped in a cycle of making only the minimum payment on these cards while the interest accrues to amounts you will never be able to pay off.  Credit card debt is one of the easiest kinds of debt to discharge in bankruptcy.

Your wages are being garnished. If a creditor obtains a court order for a wage garnishment, your employer is required by law to abide by the order and withhold money from your check each pay period until the debt is paid off.   If your wages are being garnished you can still be protected by the automatic stay, which will halt further wage garnishment.

You cannot afford your bills.  If you were recently laid off from your job or had an unexpected medical expense, for many Americans it is just a matter of time before even a small amount of debt can spiral into something much greater.  Chapter 7 bankruptcy is specifically designed for individuals and families whose income level is not sufficient to pay their debts.

You are on the verge of losing your home.  If your financial situation has reached the point where you are behind on mortgage payments and facing possible foreclosure, filing for bankruptcy can help you get caught up on those payments while remaining in your home.

If you are facing any of these financial hardships, it is best to consult with an experienced Miami bankruptcy attorney who can advise you on the best course of action to take.  At Kingcade Garcia McMaken, we know how to put the bankruptcy laws to work for you. Since 1996, our firm has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover.

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