File Bankruptcy Due to Impact from the Coronavirus
Today, the Trump administration officials warned the Senate that the coronavirus outbreak could cause unemployment to reach 20 percent. With the stock market struggling and the health of the economy in serious danger, bankruptcy will be on the rise.
According to the Bureau of Statistics, the estimated high unemployment rate would double and be the highest since the Great Recession from 2007-2009. During that time unemployment rates reached 10 percent. Meanwhile, during the Great Depression in the 1930s, the unemployment rate hit a high of 25 percent.
The coronavirus has already begun impacting employment. As the number of people with the virus continues to grow, companies will continue laying off workers. As of now, those hit the hardest are airline workers and people in the hospitality industry.
Will individuals Need to File Bankruptcy?
With the high rates of unemployment and the economy in danger, people will seek out bankruptcy lawyers to help them get out of debt. Bankruptcy is a legal proceeding involving a business or person that can’t afford to pay their debts. Bankruptcy allows individuals and businesses to be free from debts by allowing them to get a fresh start. Theoretically, allowing people to file bankruptcy can benefit the economy by giving individuals and businesses another chance to gain access to credit and providing ways for creditors to be repaid.
What are the Different Types of Bankruptcy?
Chapter 7 Bankruptcy
Individuals and businesses with limited to no assets can file a Chapter 7 bankruptcy. In chapter 7 bankruptcy, individuals can completely wipe out their unsecured debts such as their credit cards and medical bills. To qualify for a Chapter 7 bankruptcy, you must pass a Means Test.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is for businesses. The goal of a chapter 11 bankruptcy is to reorganize the debt and become profitable. Filing a Chapter 11 bankruptcy allows businesses to restructure. This allows the business to continue its business activities while working on a debt repayment plan.
Chapter 13 Bankruptcy
Individuals who make too much money to qualify for a Chapter 7 bankruptcy under the means test can file a Chapter 13 bankruptcy. In a chapter 13 bankruptcy, individuals and businesses can repay their debts over 3-5 years without interest accruing.
Advantages of Filing Bankruptcy:
Declaring bankruptcy can help you get out of debt and start over. It can help you start saving immediately. It can also help you start rebuilding your credit. Many people are under a misguided impression that when you file bankruptcy your credit is ruined. This is not true. Many people are able to actually have perfect credit within two years. If you are thinking of filing bankruptcy or may need the assistance of a bankruptcy lawyer call today for a free consultation.
Karra L. Kingston Esq. Is a New York and New Jersey Bankruptcy Lawyer. Karra Helps indivudals get out of debt and start their lives over.