Have you considered filing for bankruptcy but have some reservations about it due to the current pandemic? Discover some things that you should know about how the state of the world could impact a bankruptcy filing.
Determine If You Have a Long-Term Financial Problem
First, take a deep look at your current financial problem. Is it something that will affect you long-term? Or if it is only a short-term problem that you are dealing with due to the pandemic? For example, if you are currently out of work due to working in the service industry, you may have fallen behind on your bills and are struggling. But do you see yourself having a positive cash flow during the next six months to a year when things start to return to normal? If so, then you might want to hold off on bankruptcy.
On the other hand, if there are circumstances beyond the pandemic that have caused you to fall on hard times and you won't get back the cash flow that you need, then definitely consider bankruptcy. For example, you may have a permanent injury that has made you unable to go back to work or have so much debt that even returning to work will not get you out of it.
Consider If You Qualify Due To Means Testing
If you've been out of work for several months, it may make you more likely to qualify due to means testing. That is because means testing looks back at the past several months of income. Being out of work due to the pandemic can make that means testing appears more in your favor. Things like the recent stimulus checks will not be considered as income as well, since they are technically a tax refund. They won't impact your means testing in a negative way that would prevent bankruptcy from being possible.
Look Into If the Automatic Stay Will Help You
Filing an automatic stay means that creditors won't bother you for the money you owe, and any eviction or foreclosure on your home will stop. However, it is worth looking into what is happening in your state that may already protect you. For example, if there is a moratorium on evictions and foreclosures, then you may not need that automatic stay to protect your home. If there is no protection and you are at risk of losing your home, then bankruptcy and the automatic stay can buy you some more time.
To learn more about if bankruptcy is right for you during the pandemic, speak to lawyers like C. Taylor Crockett, P.C.