The COVID-19 pandemic has taken a toll on people in more ways than one. While it undoubtedly has physical affects, it has also presented challenges in people’s financial lives.
Unfortunately, the outbreak continues and many people are beginning to worry about how to get out of where they are at now financially.
When making any decision, it is important to consider all your options. For some, bankruptcy is the right option. But it isn’t the only option.
Here are some solutions to consider if you have been financially affected by the pandemic:
Tips to Avoid Bankruptcy
If you have found yourself with mounting debt, you aren’t alone. Many Americans have debts. While some debt is a result of overspending, it is most commonly caused by uncontrollable circumstances.
Before you jump to file bankruptcy, it is recommended that you try some of these other methods to get your debt under control:
Cut your expenses.
When it comes to getting your finances in order, it is important to know exactly where your money is going. Oftentimes, you can find money to pay off debt by determining areas where you are currently spending that are unnecessary.
Create a list of all your expenses and cut where you can.
Prioritize your debts.
In your list of expenses should also be a list of all your debts. Many people make the mistake of blindly paying off debt, but it is more efficient if you do it with a plan.
Determine which ones have the highest interest rate and mark those as top priority. From there, make the minimum payment on all other debts and put as much as you can toward those top priority debts.
Negotiate with creditors.
Did you know you can negotiate with your creditor? There is no guarantee anything will change, but it is worth a try.
Contact your creditors as soon as you realize you are struggling. Ask if they are able to reduce interest rates, change the payment terms or reduce your fees.
Negotiate hard – most aren’t willing to negotiate more than once.
Bankruptcy Is an Option
If you have tried all other options and still need help, filing bankruptcy might be an option for you.
Your financial situation will determine which type of bankruptcy you qualify for and which is best for you.
There is chapter 7, chapter 13 and chapter 11 when it comes to personal bankruptcy.
The most common form of bankruptcy is chapter 7 and is a fairly quick way to discharge most, if not all, of your debts. If you don’t qualify for chapter 7 and just need time to “catch up,” then chapter 13 is another option.
Lastly, if you want the benefits of the chapter 13 repayment plan but your debt is too high, there is chapter 11. Each chapter comes with different requirements and factors, which is why hiring a bankruptcy lawyer to guide you is best.
Filing Bankruptcy? We Can Help!
Bankruptcy is one of our specialties. If the pandemic has you looking for financial relief, we’re here to help you navigate the road to that.
We know that times are especially stressful right now, let us help.
Let’s talk today and determine if bankruptcy is the right option for you.