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Why You Shouldn't Wait to File Bankruptcy During COVID

It never helps to delay when it comes to finances. We can take action now to protect your assets. Keep those savings instead of exhausting them to pay creditors and then really being in trouble.

The COVID-19 pandemic that began in March isn’t just a health issue. It has thrown millions of Americans out of work as businesses shuttered throughout Georgia and the nation. Unemployment is at levels not seen since the Great Depression of the 1930s. Even if your workplace is open, you may be on reduced hours or even asked to take a pay cut, as many people are still sheltering in place.

As a result, 58% of Americans have lost income. Many folks in our state are struggling to pay their bills. It could be your mortgage, your car or truck payment, credit card debt, medical debt, and more…but the common factor is, you just can’t pay.

You feel stressed. You may be getting calls from creditors. You may be getting threatening notices that banks intend to foreclose on your home or repossess your vehicle. 

If you can’t pay your bills, you may be feeling paralyzed right now. You’re not sure where to turn. 

Bankruptcy Is a Solution, Not a Cause for Shame

If that’s your situation, you shouldn’t wait to call a lawyer to discuss filing for bankruptcy. You may be asking – why should I call now? Why not just wait?

Because attempts to pay your bills without sufficient funds coming in to pay them will eventually exhaust every cent you have. You could end up penniless, especially if you are spending your stimulus check, any savings, and even retirement funds in order to pay your creditors. You could also lose your home, your car, and other property. 

If you can’t keep current with bill payments, you are likely incurring interest charges, late fees, and penalties. All these have a way of mushrooming – meaning that you’ll never be able to catch up and pay all the money you owe.

Think of it this way – if there’s a leak in the roof, it’s not going to get better over time. You have to fix it now.

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Bankruptcy Can Protect Your Assets

It never helps to delay when it comes to finances. If you just got a stimulus check or have a finite amount of savings, the best course of action may not be spending it on debt. If filing bankruptcy ends up being the best path forward, we can take action now to protect your assets. If you file now, you can keep those savings instead of depleting them and then really being in trouble.

Many people are not familiar enough with bankruptcy to realize that it can be a way to protect your assets, rather than being stripped of them. They know bankruptcy only as a source of shame.

There’s no shame in being in financial trouble, ever. But especially now at a time when economic crises are happening to so many people.

Watch: Bad Things Happen To Good People

Woodall 2020 Will Video 1
 

The state of Georgia allows people filing for bankruptcy to shield, or exempt, certain types of property from creditors. Why? Because it recognizes that people need homes to live in and vehicles to drive to work, to get groceries, and other tasks. Real estate property, motor vehicle value, and personal property are among the exemptions, up to specified amounts.

Understanding Types of Bankruptcy

There are two major types of bankruptcy: Chapter 7 and Chapter 13

To file for Chapter 7, you must meet a means test. If you meet it and file for Chapter 7, your general unsecured debt, such as credit cards and medical debt, will be eliminated. You no longer need to pay it back. Your secured debt, such as a car loan, may be discharged if you return the collateral (the car).

Chapter 13 is quite different. People who file for Chapter 13 bankruptcy receive a repayment plan to pay their creditors back over 3 to 5 years. They keep their assets, such as their house and savings. If you’ve fallen behind on a mortgage or car payment, Chapter 13 can provide a chance to catch up on your payments.

Chapter 13 is used by people whose income is over the limit for Chapter 7 or who want to stop a foreclosure. 

In both cases, creditors will be stopped for pursuing you for payment. A trustee will sell any nonexempt property and use the proceeds to pay your creditors.

It’s a good idea to discuss the pros and cons of each with an attorney. 

Restoring Your Credit Score

 Filing for bankruptcy does, unfortunately, lower your credit rating in the short term. 

The effects can be turned around. In fact, the sooner you file, the sooner you can take our free online credit rehabilitation course. The course provides a series of steps, so you can work on getting back to a 720 credit score.

Don't Wait To File

You have nothing to loose and a lot more to gain by finding financial peace now. Talking to us is completely free. Don’t wait.  Give us a call at 229-247-1211 and we'll be glad to help.

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Orson Woodall, owner and founder of Woodall & Woodall, is a 25-year veteran attorney helping Georgians break free of the stress and difficulty of overwhelming debt. Based in Valdosta, GA, Woodall & Woodall has helped more than 23,000 individuals find financial relief through bankruptcy.

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