Expected Increase In Bankruptcy
If you haven’t heard about the novel coronavirus pandemic going on currently, you might be living under a rock. If you are aware and are following government-approved precautions and social distancing, you are basically required to live under a rock. This means millions of people in America and worldwide are required to stay home from work. Bars and restaurants are restricted to take-out only, and other businesses such as gyms are shut down. Some businesses, especially those that use foreign imports, are struggling because manufacturing in China has slowed to a halt.
Lower Income For Business During COVID-19
Businesses are seeing drastically lower income, and employees are losing their jobs or making less money. While measures such as suspending mortgage payments and interest on student loans have been put in place, they likely won’t be enough to account for the loss of income for millions of Americans. Some Americans will be receiving a stimulus package from the government, but even this might not be enough.
Debts Can Result In A Judgment Against You
If you were recently laid off, or had your wages or hours decreased, $1,200 probably isn’t going to help you much. This is especially true if you already had debt before the spread of COVID-19. While you may be getting a break on your mortgage and other payments, creditors from debts such as repossessions and credit cards aren’t currently prevented from collecting. These debts can result in a judgment against you, which can eventually evolve into a wage garnishment process in Mesa. A garnishment typically takes 25% out of your wages to pay your debts, and your creditor can add interest and legal fees to your balance. Losing a quarter of your wages can be even more difficult if you are experiencing reduced income due to the current pandemic situation.
With a record 3.3 million Americans filing for unemployment this week, it can only be expected that Mesa bankruptcy filings will increase accordingly. In 2008, during the last economic recession, bankruptcy filings went up 33%. As the effects of quarantining compound, it can only be expected that bankruptcy filings will increase again.
If you’re struggling with finances, discussing your options with a knowledgeable bankruptcy attorney in Mesa may set you at ease. Our office offers free phone consultations so you don’t even need to leave your home. Scheduling your consultation is the first step towards a financial fresh start. Learn all about the advantages and disadvantages of filing bankruptcy in Mesa with your initial free consultation.