The continuous stress of the pandemic on the economy is causing more and more people to find themselves in financial dilemmas; causing bankruptcies to quickly rise as the best financial option for thousands of Americans. Thankfully, along with the much-needed CARES Act, corona-related bankruptcies have also experienced positive support and change to accommodate the needs of many struggling households. To help you stay in the know on the most recent transformations to the bankruptcy process, our bankruptcy lawyers have listed a few key changes.
- Not all Income is Calculated. In the past, all income has been considered when one is filing for bankruptcy; however, this is no longer the case. Certain COVID relief payments, such as the stimulus checks, are now exempt and will not be counted against you during the bankruptcy process.
- Longer Bankruptcy Plans. Chapter 13 bankruptcies help individuals get back on their feet by breaking their debt up into more manageable payments. In the past, these payments have usually been spaced out over a period of five years; however, those impacted by the pandemic may now see their payback time stretched to seven years – decreasing monthly payments and easing your financial situation.
- Loan Forbearance Payback. During the summer months, countless people took advantage of special CARES Act plans such as mortgage forbearance. While this forbearance gave individuals the chance to get back on their feet financially by postponing their mortgage and rent payments, these payments are now coming due. The CARES Act didn’t eliminate payments – it only bought people a little more time. To avoid foreclosure on their homes, many people are now needing to turn to bankruptcy in order to save their property.
- The View of Bankruptcy is Changing. While no one hopes to need to pursue bankruptcy, the pandemic has led many individuals to do just that. The share of homeowners behind on their mortgage payments hit a 21-year high in July leading to potentially many upcoming foreclosures. With the onslaught of people turning to bankruptcy as their best hope for a better financial future, the societal view of bankruptcy is starting to shift from its previously negative outlook. Rather than viewing bankruptcy as a black mark on one’s personal record, the world is starting to understand that COVID-19 put a financial hardship on many fillers and that bankruptcies are a necessary and positive tool that many are using at these times.
There’s never a “perfect time” to file for bankruptcy, however, as the world struggles to get through the pandemic the above-mentioned benefits give you the best opportunity to eliminate debt and find financial freedom if you act now. By choosing to pursue a Chapter 7 or Chapter 13 bankruptcy, you can help start to reclaim your life and your finances sooner rather than later – leaving you in a much better financial state to face the future with. Contact our bankruptcy lawyers today for a free case evaluation.