19 Mar Bankruptcy filings will be on the rise as the coronavirus spreads
by Karra L. Kingston, Esq.
The coronavirus is going to begin impacting people’s financial circumstances. Even if the coronavirus does not impact their health directly, it will stop people from going to work and obtaining new jobs. The coronavirus will more than likely force many employers to close due to economic difficulties.
According to recent studies, one in four Americans do not have enough money saved to cover more than two months of expenses and one out of every four people doesn’t have any savings. This means that going without work for a few weeks to a month will leave people in dire situations. If that isn’t enough to convince you, Chase Bank recently did a poll that estimated 40% of adults wouldn’t be able to cover unexpected expenses of more than $400. With the inevitable impacts of the coronavirus and these statistics, many individuals in New York and New Jersey will be forced to file bankruptcy.
To date, airlines are beginning to see these effects and so are restaurants and casinos. Many individuals and businesses are already on the verge of filing a New York and New Jersey bankruptcy. With consumers forced to stay home and laws restricting the number of people in restaurant establishments, hospitality workers are gearing up for a financial downfall. Many of these employers and employees will lose their jobs. The worst part is that many of these restaurant workers only make minimum wage and rely on tips throughout the year. Many restaurant workers do not include their tips when they file their tax returns.
Medical debt has been the No. 1 reason people file for bankruptcy for the longest time ever. Medical experts believe that if infected with the virus, it may take as long as three full weeks to recover. People will be forced to miss work while accruing debt. For many household expenses, mortgage payments, credit card payments and student loan payments will be missed, leaving them with an enormous amount of debt.
What If I Have to File a New Jersey Bankruptcy or New York Bankruptcy?
If you are worried that you may need to file bankruptcy within the next few months, don’t panic, you are not alone. People file for bankruptcy every day to help them get a fresh start.
Bankruptcy laws were created to help the unfortunate debtor who fell into a hardship. It is important to speak with a New York bankruptcy lawyer or New Jersey bankruptcy lawyer as soon as possible to begin the bankruptcy planning process. Bankruptcy planning is essential to ensuring your case runs smoothly when the time comes. Keep in mind that many lawyers give free consultations that you should take advantage of. The only thing it will cost you is your time.
What Should I Do Now to Help with the Impacts of the Corona Virus?
If you are already facing a financial hardship, there are some things you should not do before filing bankruptcy or at the very least, speaking with a bankruptcy lawyer:
● Do not cash out your retirement funds. Many of your retirement funds will be exempt if you decide to file bankruptcy. Thus, cashing them out and not having any money left for retirement would not be smart.
● Do not transfer property out of your name. When you file bankruptcy there are different exemptions that can help you keep property. Moreover, bankruptcy courts have a look back period for any fraudulent transfers. Speak to a bankruptcy lawyer before doing this.
● Do not pay your credit cards but pay your mortgage payment. If you have to choose between paying your credit cards or your mortgage, pay your mortgage. Credit cards are unsecured and there are multiple ways to handle them in the future.
● Do not pay back any friends or relatives for past debts. The New York Bankruptcy Court and New Jersey bankruptcy Court treats these as preferences. The Court wants to ensure that all creditors are treated equally. This includes paying back your mom, dad, brother, sister or any other relative that loaned you money.
Speak to a bankruptcy lawyer if you have questions about how the bankruptcy process works and what you will need in the future to qualify. Don’t hesitate to call a lawyer now even if you don’t want to file bankruptcy just yet. Call and ask questions so that you are fully prepared if and when the time comes.
Karra L. Kingston Esq. is a New York bankruptcy lawyer and New Jersey Bankruptcy lawyer. Karra has helped hundreds of people get out of debt and start their lives over. With the impending threat of the coronavirus, she is offering free telephonic and electronic consultations. She can be reached at moc.l1597195551iamg@1597195551walyc1597195551tpurk1597195551nabbw1597195551 or (973) 979-9078. Visit her website at bankruptcylawnynj.com.
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