Adam Law Group Blog

Planning for Bankruptcy During the Coronavirus

 

If you recently lost your job or are uncertain about how you will pay off a debt, it might be a good idea to consider filing for bankruptcy. The number of people facing this situation is likely to increase as the coronavirus pandemic forces people to stay home and close their businesses. 

 

Even though bankruptcy might not be for everyone, if you have decided on filing for bankruptcy, you should be prepared to ignore some common financial advice and to begin planning defensively. To better help you prepare for what lies ahead, the following will review some helpful bankruptcy advice that can help you through tough times.

 

Do Not Touch Retirement Assets

 

It is hardly ever a good idea to touch retirement assets, even though the current pandemic has led to individuals bein permitted to withdraw up to $100,000 from their 401(ks) or individual requirement accounts without facing penalties or mandatory withholdings. 

 

The coronavirus has resulted in a nearly unprecedented number of people facing unemployment and other hardships. Consequently, few people during the financial crisis can pay back money that is owed, which is why you should not worry about such temporary hardships. Additionally, money placed in retirement accounts is often protected from credits and should not be used to pay off debt that could be erased through bankruptcy.

 

Prevent a Cash Accumulation

 

Cash can play an important role because money in bank accounts can be seized by creditors at any time. You should, however, be cautious about where you place extra cash. You might decide on a Roth IRA, which offers the advantage that any contribution can later be withdrawn tax-free without penalties. 

 

Avoid Selling Stuff

 

During difficult times, most people are told to sell unneeded possession to pay off whatever they owe. If you are considering bankruptcy, however, it is important to consider whether the asset you are selling is capable of being exempted. You should also avoid transferring your assets because a bankruptcy trustee might end up pursuing litigation against you to recover this property. 

 

Do Not Forget About Forbearances.

 

Due to the coronavirus pandemic, many lenders are offering borrowers the opportunity to skip some payments. Because these debts must still be repaid, it is a good idea to only make the most of these opportunities, if necessary. 

 

While Chapter 7 can erase things like credit card debt, it cannot erase other things like student loans. For people who are facing potentially momentary hardships, forbearance is an excellent way to take control of your credit situation. 

 

Contact a Knowledgeable Jacksonville Bankruptcy Lawyer

 

For many people who are struggling with debt, the bankruptcy process can be a powerful way to rebuild credit. Despite this, many people are hesitant to talk to a bankruptcy attorney due to the coronavirus pandemic. While it might be possible to navigate the bankruptcy process on your own, many people discover that the assistance of an experienced attorney is invaluable. Contact Adam Law Group today.