These really are unprecedented times. Our country has been through wars, recessions, and depressions. But a virus? This little bitty “bug” has wreaked havoc on our lives, not to mention our economy. If you think you have not been affected financially by this pandemic (or won’t be in the future), think again. Experts say that more than 40 percent of this nation’s 30 million small businesses could close permanently within the next 6 months!!
This is a crisis that will impact our economy for generations. The government has attempted to keep the economy from spiraling out of control by injecting a massive amount of cash and benefits into the system. So far the price tag has been over 2.5 trillion dollars. This is an amount that my children’s children will be paying in the future. I sat down with my younger kids, they range in ages from seven to seventeen. I asked them do they really know how much one trillion of anything is??? Putting it into perspective I explained it like this…..If one dollar constituted one second of time, 1 trillion seconds would be the equivalent of 31,709 years! It’s really mind-blowing if you think about it. Within the next 6 months, at least someone you know will be filing for bankruptcy protection. Will that someone be you?
If you happen to find yourself in the position of filing for bankruptcy protection because of the Coronavirus, here is what you need to know. First, there are two chapters of bankruptcy a person generally files, Chapter 7 and Chapter 13. Chapter 7 bankruptcy or better known as liquidation bankruptcy discharges (i.e. wipes out) most or all of your debt with the exception of the ones you want to keep, like house and car(s). Chapter 13 bankruptcy is commonly known as debt consolidation. I am commonly asked by clients if they can file a debt consolidation and not file for bankruptcy with my office.
Make no mistake, if you contact an attorney to file a debt consolidation, you are filing a chapter 13 bankruptcy. Do not be confused. Chapter 13 bankruptcy is a great financial tool for those individuals who are behind on their car or home. If they have too many assets and do not want to lose them in a chapter 7 bankruptcy liquidation. Lastly, chapter 13 bankruptcy is intended for those individuals who make too much money to qualify for a chapter 7 bankruptcy. Bankruptcy can definitely help you if you have been affected financially by this pandemic.