COVID-19 and Bankruptcy

Tampa Bay Bankruptcy and Debt Relief Attorney

It is certainly not an exaggeration to say that the United States will be recovering from the effects of the coronavirus for years to come, both emotionally and financially. According to the New York Times, over 40 million Americans have lost their jobs in the last four months. Sure, you've been making it work, between the one-time stimulus check and the extended unemployment benefits. But many of these emergency measures are ending soon, and bankruptcies for both individuals and companies are predicted to skyrocket for the rest of 2020.

COVID-19 and Bankruptcy

What Can You Do before Bankruptcy?

There are several programs out there to help struggling consumers, though it's important to check their expiration dates. Many states and local cities suspended evictions and foreclosures during shutdowns, which stopped people from being thrown out on the streets. But these programs didn't waive payment, they just deferred it. So, you might have a very large mortgage payment coming due very soon.

Many car loan lenders and utility companies are offering COVID-19 assistance or payment deferment, which adds your missed payments to the total principal balance but will keep you out of collections for the time being. Got school loans? The federal government is offering temporary deferments on US Dept. of Education loans, and many private banks have similar programs. It's important to remember that you must contact these companies and ask to be included or given these payment options. Don't just stop paying your bills and assume they'll cover it.

For many people, these temporary actions can help them weather the summer, but the bills coming due aren't getting any smaller.

Is Filing Personal Bankruptcy the Solution?

Nobody wants to file bankruptcy, but it's good to know your options. Before you take steps to filing bankruptcy, it's good to get some real-world bankruptcy advice first. Find an affordable bankruptcy lawyer and have a frank, honest conversation about your situation, both in the present and what it might look like in the future. If you know that you'll still be underwater when all these deferred payments come due, your best option might be filing Chapter 7, Chapter 13, or Chapter 11 now, while you're still laid off or your payments are deferred.

If bankruptcy might be in your future, it's also a good idea to take advantage of deferred payment programs now and save your money. Since we don't know exactly when this outbreak will end, there's no predicting how the economy will look in six months or a year. You might need those extra funds to pay for basic living necessities later, and the debts may just be discharged later during the bankruptcy proceeding. During times of great economic insecurity like now, saving your money for basic living expenses should be a priority.

Work with an Experienced Bankruptcy Attorney Today

At Coleman Law Group, we believe bankruptcy is a tool to help people when they need it most. Contact us today to set up your free bankruptcy consultation and get your second chance!

St. Petersburg and Tampa: 727.214.0400.

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