Bankruptcy After A COVID-19 Layoff

Newspaper with headline about layoffs during COVID-19.The COVID-19 pandemic has created significant hardship for many people. As of June 2020, approximately 17.8 million people in the U.S. were unemployed. Across all industries and all levels of work seniority, many people are having a hard time making ends meet. Most stimulus checks were spent long ago, and although families are gaining some savings due to eating at home more and driving less, there’s often not much money leftover each month to pay bills. If this sounds familiar, you may be asking yourself questions like, “how much does bankruptcy cost” and you may be concerned that you don’t have enough money to pay a bankruptcy attorney.

What Are Some Options For Those Struggling Financially Due To COVID-19?

Some assistance, such as stimulus payments and increased unemployment benefits, has been provided to those affected by furloughs or layoffs and the federal government is currently evaluating yet another relief package. Many states are using the SNAP program to provide food stamp supplements to struggling families. Additionally, federal and state governments are working closely with creditors to help people reduce their mortgage payments.
All of this is helpful, but it may not provide enough financial relief for people who have been out of work for a prolonged period. If you have been furloughed or laid off and need immediate financial relief, find out what options are available to you from your various creditors. Take an audit of all of your bills and then call each creditor to ask if they are offering any assistance in the way of forgiven payments, payment reductions or loan extensions. It’s important to continue to pay your bills to the best of your ability until you secure any payment relief from your creditors, but trying to see if you can work with them is the best way forward. Be sure to include all of the following on your call list:

  • Credit cards, car loans and mortgage lenders. Many lenders will grant a reprieve of one to three months’ worth of payments. Be aware of the terms, however, as most often the lender will add the missed payments and interest to the end of the loan.
  • Student loans. Many student loan organizations have pledged to temporarily defer student loan payments due to the pandemic.
  • Utilities. Although you may not get payment assistance, many utility companies have pledged to not turn off services due to missed payments during the pandemic.

Is Bankruptcy A Good Option?

If you’ve been laid off or furloughed due to COVID-19 and find you are drowning in debt despite trying in earnest to reduce costs, postpone payments and take advantage of available assistance, then bankruptcy may be a prudent option. Bankruptcy doesn’t automatically eliminate all forms of debt, but this financial tool can be used to discharge rent, medical bills and credit card debt and help you make a fresh start. One of the most helpful features of bankruptcy is the automatic stay which prohibits creditors from contacting you to demand payment until after your case is completed.

How Much Does It Cost To File For Bankruptcy?

There are fixed administrative and court filing fees associated with filing for bankruptcy and there is also a fee to hire and retain a bankruptcy attorney. Some people try to file for bankruptcy on their own in order to avoid paying attorney fees. Unfortunately, this can lead to costly mistakes or worse still, a dismissal of the bankruptcy case. The bottom line is that there is no easy answer to the question “how much does it cost to file for bankruptcy” – the cost of filing for bankruptcy varies based on the complexity of the case. Be very wary of any attorney who posts a flat fee on his or her website or quotes you a fee without taking the time to meet with you to fully understand the details of your case. Reputable bankruptcy attorneys have several strategies for working with clients who are struggling financially, from payment plans to using funds previously allocated for monthly expenses.

How Can I Find An Experienced Bankruptcy Attorney?

COVID-19 layoffs can be incredibly stressful as they come at a time when it is challenging to find other work. If you are feeling overwhelmed by monthly bills that you can’t pay, you may want to consider filing for bankruptcy as an option to improve your financial well being. Don’t disregard filing for bankruptcy just because you are short on cash. At Sirody & Associates, we have extensive knowledge of Maryland bankruptcy law and have been helping Marylanders get a fresh financial start for over 25 years. Our attorneys will meet with you in person, by video conference or over the phone to better understand your unique situation and provide you with the information you need to make the best decision to ease your financial burdens. Contact us online today.