If you were struggling financially before the coronavirus hit, it may feel as though the pandemic pushed you past the point of no return. Alternatively, you may have been experiencing a dependable level of success, but an unexpected layoff or business shutdown has now crippled your income. Either way, you may be one of the millions of Americans who aren’t sure how to make ends meet in the coming months.
When you originally envisioned a future for your family or your business, you likely did not anticipate bankruptcy. Negative stereotypes liken bankruptcy to a symbol of defeat and permanent financial ruin, but this couldn’t be further from the truth. Governments have written bankruptcy into their laws for hundreds of years to give honest debtors a chance at a better life. With proper guidance, you can take full advantage of this option.
One question you may be asking, however, is whether now is the right time for bankruptcy. Should you continue to struggle with growing debt and high interest rates? Should you wait for the government to distribute more relief payments in the future?
The following is a list of three major reasons why it may be time to file bankruptcy. As always, please reach out to us here at Bach Law Offices, Inc. with any additional questions or concerns.
Although state and federal governments have implemented various forms of financial relief for individuals and businesses, little is stopping debt collectors from suing borrowers during the crisis. In fact, some agencies have obtained judgments against debtors, levied their bank accounts, and seized their CARES Act stimulus checks.
If a debt collector sues you, they may be able to:
Bankruptcy is one of the most effective ways of preventing or halting these tactics. It triggers the automatic stay, which prohibits creditors and agencies from attempting to collect your debt. The automatic stay lasts for the duration of the bankruptcy process, giving you the opportunity to reorganize and discharge debt without fear of losing what’s most important to you.
While businesses and organizations across the country have shut down, Bankruptcy Courts are fully operational. You should expect delays if you file, but you can still take advantage of this process.
Additionally, many Bankruptcy Courts have temporarily adjusted their operations and procedures in response to COVID-19. Much of the process can take place remotely, such as hearings conducted via phone or video chat. You might also benefit from relaxed signature requirements—instead of signing documents in person, you can submit electronically reproduced (i.e. faxed, photocopied, etc.) signatures. Illinois has also issued an executive order temporarily allowing notarizations to occur remotely.
These adjustments may allow you to complete the entirety of your bankruptcy process from the safety and comfort of your own home.
In February of 2020, the Small Business Reorganization Act added Subchapter V to Chapter 11 bankruptcy. This is a significant development for small business owners because it eliminates many of the obstacles that had made Chapter 11 highly impractical.
For example, small business owners can now propose their own repayment plans, and they do not need to obtain approval from creditors. The court also will not require disclosure statements or the formation of a creditors’ committee. Due to this streamlined, cost-effective version of Chapter 11, small businesses can reorganize and reduce debt without liquidating their company.
Additionally, the CARES Act temporarily adjusts bankruptcy in the following ways:
These provisions will sunset in March of 2021.
Local, state, and federal governments have employed vastly different strategies to mitigate the effects of the pandemic. And while politicians have suggested they may continue to provide relief as needed, we cannot depend on this promise or use it to prepare for the future.
If you are looking for predictability, security, and legitimate relief, bankruptcy may be the option you need. At the Bach Law Offices, Inc., we have an in-depth understanding of the Bankruptcy Code, and we know how to work these laws to every client’s advantage.
Ready to learn more about your debt-relief options? Call (847) 440-5998 or fill out our online contact form today. We are conducting all consultations remotely to continue providing essential legal services without compromising the health of our clients and community.
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