How to Handle Your COVID-19 Debt
The COVID-19 pandemic has changed our lives in dramatic ways in a very short period of time. Within weeks after the first stay-at-home orders were issued, millions of people had been laid off from their jobs. Millions more had to take a pay cut, were furloughed, or were temporarily suspended from their jobs. All of that has led to a surge in unemployment claims and calls to bankruptcy attorneys in Gilbert.
Many people are now struggling to make ends meet and are using credit cards or taking out loans to get there. Unfortunately, that is going to lead to overwhelming debt later. Instead of relying on credit cards, here are a few things you can do to manage your COVID-19 debt so you don’t come out the other side with a bankruptcy filing:
Get Whatever Income You Can
You may have been laid off, or you may be in a job that you can’t work until things open back up, but you need an income to live. The first thing you can do is file for unemployment benefits to get whatever income you can coming in as soon as you can.
In the meantime, apply for all the jobs you can. Consider working jobs you might not otherwise while you are trying to find a better-paying job that you would enjoy. Whatever income you can bring in will help you to pay your bills and minimize your debts.
Prioritize Your Finances
You may not be able to pay everything you owe right now, but you need to think through the consequences of paying or not paying so you can prioritize your payments and suffer the least amount of long-term consequences. For example, if you don’t pay your Internet bill, you’re just going to have a bad record with that company, but none of your assets are going to be seized, and you aren’t going to hurt your credit score. However, if you don’t pay your credit card bill, you’re going to thrash your credit, and you’re going to wrack up more debt through interest and penalty fees.
Your rent or mortgage payment should be your top priority each month, followed by your car payment and any other debts secured by your property or assets. Don’t worry about medical debts or non-essential services.
Defer What You Can
You don’t necessarily have to keep making payments on all your accounts. For example, if you have a student loan, you can easily defer your payments for six months or more just by calling your provider and asking for it. It is quite common to defer student loans, so you shouldn’t have any trouble. The loans cannot be discharged in a Gilbert Chapter 7 bankruptcy , so use whatever option you can to satisfy your debt, even if it means not paying it for a while.
You may find that other creditors are willing to let you defer or lower payments for a set time also. Reach out to creditors to find out what’s possible.
Negotiate with Creditors
Don’t be afraid to call your creditors and negotiate a lower payment or a lower interest rate. Your creditors know that if you can’t pay, they won’t end up getting anything, and that will be worse for them ultimately than lowering your payments.
If your request isn’t approved initially, push to speak to a supervisor. Keep going up as far as you need to on the ladder until you get the results you want.
File for Bankruptcy
You may already have accumulated debts before the pandemic started, and now that you have suffered a loss of income, your financial problems are compounding. You can get debt relief by filing for bankruptcy in Gilbert. A Chapter 7 bankruptcy filing will discharge all unsecured debts, such as credit card debt. Depending on how much you owe, that could clear up a significant amount of money each month. A Gilbert Chapter 13 bankruptcy filing will reorganize your debts under a monthly payment you can actually afford.
Do not be intimidated by myths you might have heard about bankruptcy or about the perceived stigma. Bankruptcy is a legal right that can give you enormous debt relief so that you can make ends meet and can move forward financially. Call Gilbert Bankruptcy Lawyers today to talk with a bankruptcy attorney and learn more about your options. We handle individual and corporate bankruptcy, and we are committed to helping you get the maximum debt relief possible. Contact our Gilbert bankruptcy law office today to talk through your options with an experienced bankruptcy lawyer.