Filling Bankruptcy And Covid-19


Current Covid Cases and Deaths

Times of crisis always have a significant impact on any country’s economy. Worse, when the country is caught unprepared, and that is what we’ve witnessed around the world. COVID-19 has pushed the “superpowers” to the wall economically, and countries are struggling to remain afloat.

As part of the control measures, governments have been forced to call for businesses to close down shops except for those offering essential services. Several sectors are at a standstill, and things don’t seem to change any time soon.

With most people and businesses not earning any income, it is apparent that loan repayment will become a burden for many. And that’s why filing for bankruptcy may be the best option for most during the COVID-19 pandemic.

It is important to note that hundreds of thousands of businesses and people may be forced to file for bankruptcy, and this means that the chapter 7 option may not be viable as that would result in bad losses. The best option would be the chapter 13 bankruptcy. This will allow those servicing loans to get an extended period over which to pay the loans. Filing for chapter 13 will protect people from losing homes, and a solution for delinquent loans.

Factors that have forced people into bankruptcy during COVID-19

1.      Layoffs

We’ve already noticed this across the world. Most companies are not making any money right now, which makes it difficult to hold on to their employees. And for most people, being laid off means that the disposable income that would have been used to service the loans is no longer available. No matter the measures you put in place to lower the costs of bills and expenses at home, your expected loan repayment remains the same.

Luckily, a good number of local and state governments are working with lenders to provide relief for those people with loans during the COVID-19 pandemic. However, these efforts cannot sustain a nation if the crisis stays around longer.

If you find yourself in this situation, then the best bet for you is to file or bankruptcy and get the burden off your back for a while.

2.      Medical Expenses

A study conducted in the United States in 2019 showed that more than 65% of the bankruptcy cases are as a result of medical issues. In this period of COVID-19 medical expenses are bound to increase, and in serious situations, the expenses may result in families spending huge amounts in hospitals – expenses that can wipe out all the savings and funds that a family has. This will force more people to file for bankruptcy as they try to recover.

Impact of COVID-19 on filing for bankruptcy

The uncertainty around COVID-19 has made it difficult for those people who need to file for bankruptcy. Luckily, several courts have made compromises to allow attorneys to represent their clients in quarantine. Therefore, if you are locked indoors, there is still hope for you to file for a bankruptcy case. Miami bankruptcy Lawyer Michelle Labayen is ready to help you go through your bankruptcy filing process.

Things you should know

         i.            The courts are closed – How can I file for bankruptcy?

Yes, you can still file for bankruptcy. Even though most courts in several districts have already closed, they are still operating. Each day updates are being made, and you should check on your court’s website to find useful information on how they are operating. Most courts are receiving bankruptcy application forms through dropboxes and mail.

       ii.            If you are already in the process of filing for bankruptcy, here’s what you need to know:

If you had already completed the filling and were awaiting the case hearing, it is likely going to take a longer period than it would have because of COVID-19. There are meetings that won’t be held on the phones, and your 341 meetings may be put on hold. The delay in the 341 meeting means that your discharge will also be postponed.

For chapter 13 confirmation hearings, and other miscellaneous matters relating to your bankruptcy, they may be held over video conferencing or telephone. The attorney will update you on any developments with your case.

It is important to note that despite the delays, deadlines should be watched out for. If you were supposed to submit some paperwork or fees, ensure that it is done in time. Such dates have not changed. Missing to meet the deadlines may have a negative impact on your case.

If you are mid-bankruptcy (especially in chapter 13), the CARES Act signed a few weeks ago will impact your bankruptcy case. For example, the relief being offered to citizens of America may not be turned over to bankruptcy trustees, so you have nothing to worry about.

The right attorney for you during the Coronavirus Outbreak

Representing yourself during this COVID-19 outbreak may not be possible, as most states are under lockdown. It is even more difficult if you already have ongoing health problems, which makes you a “high-risk” individual. So, you will need a bankruptcy lawyer to represent you.

You should take note that one-on-one person interviews are not an option for you if you are thinking of interviewing different lawyers. That is why you will have to go for an established and reputable bankruptcy lawyer like Michelle Labayen. You can make a free debt consultation with Michelle Labayen before proceeding with your bankruptcy case.

The right lawyer should be willing to represent you in your absence. You should be able to reach them through phone and video conferencing. The attorney should also have in place a swift system for collecting and signing documents required in the case.

Final Take

Keep in mind that it is a terrible idea for you to stop paying bills without being sure of whether you are going to qualify for bankruptcy or not. If your loan is not covered under the guidelines provide for, by the CARES Act, you should make consultations with your lender and get further assistance. But as you try hard to maintain balance in your finances, please also ensure that you are staying safe during this COVID-19 period.

Michelle Labayen

Michelle Labayen

Michelle Labayen has been practicing Consumer and Bankruptcy law for more than 16 years. She is a member of the National Association of Consumer Bankruptcy Attorneys (NACBA), and the National Association of Consumer Attorneys ( NACA).

In addition, she is a Max Gardner Bootcamp graduate. Extensive experience has given Michelle a thorough understanding of bankruptcy, including:

  • Chapter 7
  • Chapter 13
  • Adversary Proceedings
  • Litigation under the Fair Credit Reporting Act
  • Litigation under the Fair Debt Collection Practice Act

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Contact Michelle, today, and get on the path to financial freedom.

The Law Office of Michelle Labayen, LLC Can Help With The Bankruptcy Process

Anyone can qualify to file for bankruptcy. There isn’t an exact amount of debt or financial difficulty required. You don’t have to show insolvency or meet a certain standard.

You should always speak with a lawyer before beginning the bankruptcy process to ensure it’s the best option for you. Michelle Labayen is a knowledgeable and experienced bankruptcy attorney with offices in New York, NY, and Newark, NJ. Florida licensed attorney Drew Gaddis is counsel and would be representing all clients in Florida.

Miami Bankruptcy Office

100 SE 2nd St Suite 2000 #A
Miami Tower
Miami, FL 33131
Phone: (786) 209-2327