Emergency Financial Help During A Crisis

This article originally appeared on Forbes.  The original article can be found at: Click here

There’s no question times are tough for many small businesses (though it’s good to see the private sector rising to the occasion). With customers staying home, travel canceled and most things grinding to a halt while we battle to contain COVID-19, it can be tough to stay afloat.

That’s true for businesses as well as their owners.

Help is available on both the business and personal fronts, however. And remember, with proper separation between your business and personal finances, you can — and should — keep a shortfall in one from triggering a crisis in the other.

Support Your Business, Smooth Your Bankruptcy?

Every business owner’s situation is different, and there’s no one-size-fits-all approach to dealing with the financial uncertainty we find ourselves in. But if you’re one of the many who thinks you may have to choose between saving your business and saving yourself, I may have some good news, or at least some constructive advice.

Because the need to sustain small businesses and our nation’s entrepreneurial spirit is more important than ever, the CARES Act and other legislation provide several means of support for businesses of all sizes. And because consumer strength is also important, Congress has created new means of protecting and preserving assets for those hardest hit by stay-at-home orders and the economic slowdown.

In combination, this can help you save your business and more effectively restructure your personal liabilities, allowing you to emerge in the strongest possible financial position.

First, you have options when it comes to assistance for your business. You may be eligible for a grant of up to $10,000 if your business is directly impacted by the COVID-19 pandemic. The SBA is also offering new low-interest loans for up to $2 million. These can help you tide things over and be in a good position to pick right back up when the pandemic passes.

Of course, business assistance only helps if you plan on keeping your business afloat. If you’re facing a personal financial crunch, you may be tempted to cash out your business assets to ease your personal financial situation. Before you make that choice, there’s more about the CARES Act you should know.

Better Bankruptcy With More Forgiving Terms

Normally, a Chapter 13 bankruptcy involves a payment plan lasting either three or five years. One provision in the CARES Act extends that period to seven years for anyone experiencing a material hardship due to COVID-19 and can be used until March 2021. This increased timeline can lower your monthly payments and give you more time to deal with your creditors.

The increased timeline may also give you more leverage to settle with creditors outside of a Chapter 13 bankruptcy. As with all bankruptcy-related issues, this kind of strategic planning has to be handled on a case-by-case basis, and it’s good to have an experienced bankruptcy lawyer in your corner.

A bankruptcy lawyer can also help you navigate the new income exclusions applicable to Chapter 13 cases, including payments received under the CARES Act and other legislation related to COVID-19. You may be able to protect more of your business assets and revenue than you realize, which can lower both your monthly payments and how much you ultimately pay under a Chapter 13 plan.

In short, given the increased personal protection you can achieve through a Chapter 13 bankruptcy and the business support you can receive through the CARES Act and other legislation, you should think long and hard before cashing in your business assets to resolve personal liabilities.