Prior to the Coronavirus pandemic, it was common to hear that Americans were experiencing the best economy ever. Overall, unemployment was near 3.5% according to the U.S. Bureau of Labor Statistics in January of 2020. The same source indicates that unemployment rose to 14.7% in May of 2020! Wow!
Of course, even when times were good by comparison, many families and businesses were just barely making it month to month. Now that a worldwide economic crisis is upon us, it is obvious that millions of people and businesses will not be able to economically survive with the debt that they currently have, even if a cure or vaccine is found this year. It will be too late.
People are still in shock about what just happened as of this writing, June 23, 2020, and are hunkering down to survive the storm, both from a medical and economic perspective. This is a time of waiting to see what happens next. Will my old job still be there? Will my business be able to reopen? Will there be more economic stimulus of any sort? Will there be a second wave or resurgence of COVID-19 that will bring the economy down even further? Nobody knows for sure.
Yet, the investors on Wall Street are currently betting on a good economic recovery and the stock market is reflecting that positive outlook. Even though there is no medical cure or vaccine that’s officially approved at this time, the bet is that there will be in the next six months or so. And, that positivity isn’t without cause- there are many vaccines in development and at least a few have had positive early testing results. The medium to long view is that we’ll come out of this and get back to work and back to normal life.
What does Coronavirus have to do with bankruptcy?
If you are in a bad financial situation, be it personal or business, and there is no probable or reasonable way to fix it, then contemplating bankruptcy during the crises may make a lot of sense so that you can be ready for the recovery. Waiting until the recovery to happen might make filing bankruptcy a lot more complicated and delayed. As an example, it could be complicated because you may have a new job or business opportunity that is starting and the income you are about to then earn may exceed the amounts established by the federal government called bankruptcy means testing. In short, had you filed bankruptcy during a time of unemployment or severe underemployment and at your darkest financial hour, you may have qualified for a Chapter 7 bankruptcy. But, if you bounce back with a good paying job, you may not qualify.
Delaying an inevitable bankruptcy also delays financial healing when the economic recovery begins. For many people, bankruptcy simply isn’t the end of their financial road- it’s a new beginning. And, not dealing with the impossible debts of the past might very well impede your recovery.
Misery loves company
Through no fault of their own, so many hard-working people have been thrown into an impossible financial disaster. It happened fast and without enough warning. Restaurant workers and owners, travel agency businesses and professionals, hair stylists and barbers, etc. This list goes on and on. So many people have been affected by the coronavirus either directly or indirectly. Ultimately, many good people will be forced to deal with the inability to pay their debts. There will be many people that have never in their life ever had serious financial problems and have always paid their bills. But this time, it’s different. The government will try hard to help both individual and corporate citizens with stimulus money, but that will only go so far, and it is wishful thinking to wait for an economic miracle cure from Uncle Sam.
Consider your options and prepare for the future
While it may seem premature during the ongoing medical and financial crises, wise people will plan ahead and contemplate their near- and long-term financial future. Get informed. Much of the information that is popular in the media is very superficial and over-simplified. That said, there are many actual and unique solutions that do work for a very large number of people. Your financial well-being has an enormous impact on your future and trying to “wing it” with a solution for big financial difficulties is downright dangerous. Contact our highly focused bankruptcy attorneys and staff for a detailed, experienced, and comprehensive analysis for making the right decisions for you and your family’s future today.