As a result of stay-at-home orders, job losses and business closures, the coronavirus pandemic has caused many families to suffer significant economic hardship. While filing for bankruptcy may be an option, there are also a number of financial strategies you should consider that can help you tackle your debt and protect your finances during these unprecedented times.
If your debt has become unmanageable during the COVID-19 pandemic, you might consider credit counseling. Certain credit unions and nonprofits offer credit counseling services and workshops that can provide you with valuable resources and tools that you may be able to use to overcome your financial burden. Importantly, if you’re considering credit counseling, you should ensure that the services you use are accredited by the National Foundation for Credit Counseling or the Financial Counseling Association of America.
Filing for Chapter 7 bankruptcy offers you debt relief once you’ve exhausted all other options. However, it’s important to weigh the pros and cons. While bankruptcy can put a stop to debt collection and other creditors’ actions, it can also require the selling off of some of your property. It can also have a negative impact on your credit score, which can have a range of consequences to your ability to purchase a home, a vehicle or other commodities. In some cases, bad credit can also prevent you from securing a certain job.
You should also consider the type of debt you incurred prior to filing a petition for bankruptcy. There are certain debts that bankruptcy cannot erase, including child support, alimony, taxes, student loans and property liens. Depending on your specific circumstances, you may need to develop a strategy that will address those nondischargeable debts.
If you are earning consistent income but could benefit from reorganizing your debt, filing for Chapter 13 bankruptcy may be a better option. It allows you to enter into a repayment plan with your creditors by which you would make installment payments over the course of three to five years. Unlike a Chapter 7 proceeding, which liquidates part of your assets, Chapter 13 allows you to retain your property that is not subject to liens or mortgages.
Significantly, as soon as you file for bankruptcy, an automatic stay goes into place, stopping creditors from attempting to collect debts or to bring lawsuits against you while the bankruptcy case is ongoing.
With offices conveniently located in Athens, Douglasville, Gainesville, Lawrenceville, Marietta, and Scottdale, Jeff Field & Associates helps clients in the Atlanta metropolitan area with bankruptcy matters and helps them find positive solutions for their financial issues. To schedule a consultation, call 404-381-1278 or contact us online.
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