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How COVID-19 is Affecting Chapter

If bankruptcy is your best option, try not to stress yourself out more than necessary. You are not alone in this situation, and you will be able to climb back out of it, given time. 

There is hardly an aspect of our lives that has not been affected by the coronavirus pandemic. As vaccination is rolled out and the threat of the strains remains at large, a lot of families, entrepreneurs, and small businesses, as well as some large corporations, are asking the same question – how will the pandemic affect bankruptcy? 

Let’s take a look at some commonly asked questions, and try to answer them. We’ll bear in mind, however, that the situation is prone to changing practically daily and that we can’t ever truly predict what the future holds. 

This is what we know at the moment. 

What if I Have Already Filed for Bankruptcy? 

If you’ve already filed, chances are the case will be slowed. However, 341 meetings are being held over the phone and via video conference calls. So, you may just find yourself attending one from home instead of having to leave your house. Be patient and understand that the legal system is jammed and that delays are only to be expected.

Chapter 13 confirmation hearings are also being held over the phone, so you don’t have to worry about that either. 

The court will notify you via mail about any updates, and you can always check with your attorney as well.

The one thing to stay on top of is deadlines, i.e., when filing fees and paperwork is due. They have not changed, despite the situation. If you miss them, you may be causing further delay to your case. 

What if I am Mid-Bankruptcy? 

Congress has passed the CARES Act relief package, which does affect those filing or who have already filed for bankruptcy. 

Namely, the federal government is issuing relief payments, and these payments may not have to be turned over to your bankruptcy trustees. 

These relief payments will not affect the determination of your income if you file for a Chapter 13 or a Chapter 7, or when you are calculating your Chapter 13 payments. 

If you’re filing a Chapter 13, you can modify your plans based on the damages caused by the coronavirus pandemic. 

If you have to make Chapter 13 payments, you should keep doing that if at all possible. If you can, you should also try to make all other payments – for instance, your mortgage – again, only if possible. 

What if I Want to File for Bankruptcy? 

If you’re considering filing for bankruptcy, especially if your hardship has been caused by the pandemic, you should consult a reliable bankruptcy lawyer who will be able to counsel you on the best course of action. 

Bear in mind that President Biden may be working towards new relief plans being passed and that the situation will continue to evolve further. That makes having reliable counsel on your side even more important.

Joe Biden; image by Gage Skidmore, via Flickr, CC BY-SA 2.0, no changes.

Despite the situation, you can still file for bankruptcy, as courts remain operational over the phone. You may have to settle in for a bit of a wait, but your filing can provide the relief you’re looking for. 

The automatic stay will still go into effect when you file, so you won’t have to face your creditors and bill collectors in the midst of the pandemic. 

You can, of course, choose to wait and see what kinds of relief you are or will be eligible for. But this is a decision you should make in agreement with your bankruptcy lawyer, as they will best be able to advise you. The decision truly depends on your specific case and circumstances, and no one can give you general advice on the matter. 

Final Thoughts 

A year into the pandemic, we can now safely say that the economy will not bounce back fast and that the financial repercussions caused by it will certainly have long-reaching effects. 

However, instead of focusing on the big picture and the very poor outcomes and hardships that await us, try to focus on your own financial matters. Focus on determining what the best course of action is for you and your family. 

Consult a lawyer who specializes in bankruptcy, as they will be more on top of the news than you can be, and they will be able to provide some sound advice. 

If bankruptcy is your best option, try not to stress yourself out more than necessary. You are not alone in this situation, and you will be able to climb back out of it, given time. 

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