If you have been financially affected by the COVID-19 pandemic, this article provides a couple of solutions to help you get out of debt. The safety measures taken against the spread of COVID-19 were as crippling to Georgians as the virus itself.
Below are options you can consider in turning over a new leaf and starting over in these unprecedented times. The stay-at-home order and job layoffs forced many people into the unemployment lines. In trying to deal with the economic downturn, many people have turned towards debt. Some have resorted to borrowing from friends and family while others have resorted to bank loans and credit cards.
Georgia is likely affected by the increased dependence on debt. The 16.9% poverty rate in the state is likely to surge because of COVID-19. If you are affected by COVID-19 here are some options available to you to get back on your feet and to turn over a new leaf.
If you have found yourself with mounting debt because of COVID-19, you aren’t alone. Many Americans have debt. While some debt is a result of overspending, other debts happen due to uncontrollable circumstances. Before you jump at filing bankruptcy, let’s look at some of the options below to get a handle on your debt:
Cut down on your expenses
When it comes to getting your finances in order, figure out where your money is going. If we look hard enough, we can find money to pay off debt by determining areas where we are currently spending that are unnecessary. Create a list of all your expenses and cut where you can. Eating out anyone?
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. There are apps and online programs you can use to organize and get a good picture of where all your coins are going.
Determine which debts have the highest interest rate and mark those as a top priority. From there, make the smallest 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 can reduce your interest rate, change the payment terms or reduce your fees.
Option B: Chapter 7 Bankruptcy
If there is an economic downturn in any economy, you can expect job losses to follow. This can lead to an uptick in the number of people filing for bankruptcy due to their inability to address their debts. Add a pandemic like COVID-19, and we are in uncharted territory.
It is a fact there have been more job losses in 2020 than any other time since the Great Depression, the number of people who filed for Chapter 7 bankruptcy dropped from the previous year. This could be because there is a moratorium in place as of this post being published but that may end soon.
If you are being helped by the moratorium what are your plans once it ends? The Cares Act was an attempt to help Americans but it does not look to be enough to help individuals and small businesses who continue to be affected by COVID-19.
Chapter 7, sometimes called liquidation bankruptcy, involves selling off most of your property to pay off debt. This form of bankruptcy is generally reserved for individuals with limited income who cannot pay back their debt. If you’re drowning in debt because of COVID-19, it makes sense to contact an experienced lawyer like The Wright Law Alliance.
Option C: Chapter 13 Bankruptcy
Chapter 13 is the more common option for individuals who have enough income to qualify for a repayment plan. It is a reorganization bankruptcy. As a result of this, you might get to keep some of your property.
The repayment plan allows you to pay back a part of the debt you owe over a designated time. After that, any remaining unsecured debts might be “discharged.” A few examples of unsecured debts include medical bills and credit cards. And in this case, discharged means you are not required to pay them back.
Why You Can Benefit From Hiring A Bankruptcy Attorney
Filing a bankruptcy can be a cumbersome process. A mistake during this process can further complicate things and stifle the chances of a reset or plan to help you get back on your feet. Getting professional advice and support from an experienced bankruptcy attorney is a crucial part of turning over a new leaf.
25+ years later The Wright Law Alliance continues to help Georgia residents with bankruptcy. Whether it’s through simple and complex situations we can help. We‘d like to help you also; to make that happen we’ll need to learn what you’re facing so we can come up with a custom game plan. Whether it is for a personal or business bankruptcy we look to set you on the “Wright” path to financial freedom.