2020 has been an unprecedented year. More than 22 million Americans have filed for unemployment. Cities and states across the country issued orders requiring companies to close their day-to-day operations, employees to stay home, and many to shelter in place all attempts to decrease the public’s exposure to the coronavirus. As the number of Americans who are out of work (or were out of work for a significant portion of 2020) grows, many expect the number of Americans considering bankruptcy in 2021 to increase.
High Unemployment Rates Typically Mean an Increase in Bankruptcy Filings:
With the number of Americans out of work increasing exponentially in 2020 (experts estimate the number of out of work Americans could reach 47 million or a 32% unemployment rate), many households across the country are worrying about how they’ll pay their rent, their bills, and still afford the essentials.
Before You Decide the Declare Bankruptcy in 2021:
If you are one of the countless Americans facing financial struggles due to the unprecedented measures taken to control the spread of the coronavirus, make sure you’ve considered all the options. Before you file:
- Consider Your Situation and Your Options: You can make minimum payments to stay current and wait it out hoping that your financial situation will work itself out, you can contact your lenders directly to request a settlement on the balance, or you can file bankruptcy. Particularly right now, during the Covid-19 pandemic, many lenders have programs and policies in place to help people in your situation. It is a temporary solution, but this may be all you need.
- Know the Terms of Any Assistance Programs: If you do decide to take advantage of assistance programs directly from lenders and financial institutions, make sure you know the terms of their programs. Again, this is an unprecedented year, and many of the programs in place are not typical, so the terms may not be as expected. For instance, some companies offering “no payment” relief may require full payment of all missed or skipped payments after a specified time or a certain number of skipped payments, etc. Make sure you are fully aware of the various terms of the special offer or assistance program you are entering.
- After the Temporary Assistance Programs End: Once the temporary Covid-19 programs end, you may still need help. If you participate in a “temporary” relief program with a lender, it ends, and you still need help to meet your financial obligations, you may need to think about more long term solutions like filing bankruptcy in 2021.
Once You Decide to File Bankruptcy in 2021:
If you have exhausted all your options, and looking at your finances makes it clear that there is a bankruptcy in your future, you may need to accept that you need to file bankruptcy in 2021. Once you decide to file, make sure that you:
- Stop using credit for any significant purchases.
- Do not sell any of your assets.
- Do not pay off any loans or account balances.
- Do not “gift” any assets.
- Do not make major, non-essential or extravagant purchases.
If you have questions about how to prepare to file bankruptcy in 2021, we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Ken Rannick at Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.