Declaring Bankruptcy During The Pandemic — When, Why, And How?

Has your financial situation taken a turn for the worse in 2020? If so, you're not alone. Many American businesses have seen job losses, closures, and low customer traffic due to regional lockdowns and COVID-19 fears. 

If this includes you, you may need to consider bankruptcy. But can you declare bankruptcy even if your area has been largely closed down? And how can you time your bankruptcy for the best results? Here are a few answers.

Can You Declare Bankruptcy During the Pandemic?

The good news is that the courts, attorneys, and the bankruptcy system, in general, are generally able to continue to serve Americans. Many courts have boosted safety by allowing digital documentation, online credit counseling classes, and even virtual hearings. Your attorney, as well, should be able to conduct most — if not all — of your meetings and work through digital means. 

Should You Declare Bankruptcy Now?

Bankruptcy is an even more important legal and financial tool with so many people suffering hard times. It's an important safety net, particularly in a situation you have little or no control over. So don't feel embarrassed or hesitant to pursue bankruptcy out of guilt — even if you've never had to resort to it before. 

However, bankruptcy shouldn't be rushed into either. Timing is essential to capture the right debts and get the most relief. If you file too early, you can't get another bankruptcy for some time. If you file too late, you may not be able to include some debts.

How Can You Time Your Bankruptcy?

Timing, then, is likely the biggest issue for the declaration of bankruptcy during a pandemic and recession. If your situation is so bad that you can't make minimum payments now, you may need to seek immediate relief in order to be able to manage any further disruptions to your income.

If, though, your debts haven't spiraled quite so far, work with your attorney to figure out if the discharge of current debts would provide sufficient long-term relief. You may need to wait until certain other debts — such as taxes or medical debt — can be officially added to the bankruptcy. Likewise, if your business faces imminent closure, you might want to wait until all personally guaranteed debts have been tallied. 

Where Should You Start?

Want to know more about declaring bankruptcy in these volatile times? Begin by meeting with a bankruptcy attorney in your state. Whether meeting in person or through other means, you'll be able to work together to find the right path out of your financial strain and into a more resilient tomorrow. 

To learn more, contact a resource like Martinez Law Firm.