I Lost My Job Due to COVID. Should I File for Bankruptcy?

Losing your job at any time is difficult, but losing it during the pandemic is an entirely different story. According to this article, the economy has been on a long, exhaustive journey toward post-pandemic normalcy – and it’s far from over. Between lockdowns, reduced hours, lack of business, delayed shipments and other factors, many companies have either cut hours or eliminated positions.

While employment is rising, the employment rate remains below pre-pandemic levels, and millions of households report not having enough money to cover their food and rent. And, as of September 5, 2021, unemployment benefits in New York officially ended. More than 1.6 million New Yorkers are now without the money they need to sustain themselves.

If you are one of these individuals, there’s no question that you’re concerned about what the future holds. Fortunately, you do have options. One of them is to file bankruptcy in New York. While no one wants to file bankruptcy, it can provide the fresh start you’re looking for.

Financial Instability Due to Coronavirus

When you lose your job or have your hours cut, there’s less money to pay the bills. That’s a given. Most households start by reducing their expenses, such as by eating out less often and getting rid of cable TV. But even then, these reductions often aren’t enough to offset your bills. The papers begin piling up and now you’re in debt.

Luckily, the government has stepped in to offer safety nets during the COVID-19 crisis, including increased unemployment benefits and stimulus checks. The New York government also mandated holds on evictions and utility shut-offs to help households in need. But the reality is that the pandemic is lasting longer than we had hoped for and the benefits are coming to an end. What now?

For some people, the easy answer is to get a job. But this isn’t as black and white as it seems. Even if you are able to find employment with decent pay and benefits, catching up on bills and past rent might not be possible. And with these bills weighing you down, you can’t move forward.

When Filing for Bankruptcy During COVID Makes Sense

If you’ve been thinking about declaring bankruptcy, the first step is to gather all the information you can. The Law Office of William Waldner can help with this initial step. We offer FREE bankruptcy consultations, so contact us at your convenience.

Bankruptcy is not something we take lightly. We will look at your total financial picture and inform you of all of your options. Here are some situations when filing for bankruptcy during COVID might make sense:

  • You’re behind on your rent or mortgage payments. Monthly rent and mortgage payments add up quickly. Thankfully, back rent and mortgage payments are dischargeable in both Chapter 7 and Chapter 13 proceedings. However, you will have to give up your home.
  • You’re about to be evicted. If you’re close to being evicted, filing bankruptcy stops eviction in its tracks. While only temporary, this gives you more time to work out your future living arrangements.
  • You have large debts you can’t repay. Whether they’re expenses related to the pandemic or debts from before the pandemic, you’re expected to pay them back. If you’re unable to do so, bankruptcy will wipe the slate clean.
  • You have a new job, but it pays less. Many people have had to take on lower-paying jobs, particularly those in hard-hit industries like travel, leisure and hospitality. You may now be working for a much lower salary. To stay on top of your new bills, bankruptcy can wipe out old debts. 

Consult with a COVID Bankruptcy Lawyer in NYC

Declaring bankruptcy is nothing to be ashamed of! The pandemic has brought unexpected hardships to Americans, many of which are financial. If you’re considering filing bankruptcy, speak with a bankruptcy attorney in New York as soon as possible.

William Waldner is an experienced bankruptcy lawyer in NYC. He has a firm understanding of New York laws and how to move through the bankruptcy process as smoothly as possible. Contact us by text, phone or email for a free consultation and get the personalized attention you deserve!

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