How Filing a Chapter 13 Bankruptcy Might Help Those Struggling Financially from Coronavirus Pandemic
Chapter 13 Bankruptcy Blog from our Phoenix Bankruptcy Lawyers on March 21, 2020. 

coronavirus and debtSeemingly overnight, coronavirus went from a vague distant threat to an emergency situation in the United States. After observing the virus spread through Asia and Europe, Americans are doing their part to self-quarantine and socially isolate. Many communities have declared an emergency status, restricting bars and restaurants to pickup or drive through orders only. Gatherings of 10 or more are discouraged on a national level. As a result, many Americans are seeing their work hours cut, and small businesses are seeing drastically less income. For those falling behind on payments they can typically afford, filing a Chapter 13 bankruptcy may be a good option to manage their debt and preserve their car and home.

The current recovery time for those infected with the coronavirus is estimated to be about four weeks. As of now, everyone can expect this semi-quarantine period to continue through at least the end of the month. The majority of Americans living paycheck to paycheck will struggle to make ends meet if their income is reduced or stopped entirely for at least a month. Lawmakers are considering forms of financial relief for Americans, but even low-interest loans must be repaid, and a one-time cash payment will probably not be enough to catch up on expenses for those most affected by the spread of coronavirus.
Once someone falls a few months behind on their monthly bills, they are at risk of losing their car to repossession or their home to foreclosure. As vehicles typically lose value the longer you own them, repossessed cars can have a remaining balance. If left unpaid, the lender will eventually get a judgment and garnish their wages even though they don’t have the vehicle anymore. While your wages can’t be garnished more than 25%, this will hit those with reduced income due to coronavirus especially hard.
A Chapter 13 allows you to spread out the amount you are behind, along with your other debts, over the course of 3-5 years. Your monthly payment will depend on how much debt you have and your income to expense ratio. Your current monthly income will be calculated from your last 6 months of pay. If your circumstances drastically change, you may have the option to convert to a Chapter 7 bankruptcy, or a discharge of all your unsecured debts, later down the line
If you are struggling financially and home from work with free time, now may be a good opportunity to start looking into bankruptcy. Our office offers consultations that are both telephonic and free so you don’t have to compromise your safety to discuss your financial situation. Call today and take the first step towards a financial fresh start. 
Therefore, if the current state of the pandemic has you questioning your financial future, know that there are options available.  You should talk to our Arizona bankruptcy attorneys today. The consultation and the advice is free. Call (480) 833-8000. Find out how our Chandler bankruptcy lawyer could help you during this national pandemic.  We have federal COVID 19 program ideas for you and your loved ones.

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