COVID-19 Debt: Measures You Can Take to Manage Your Finances

The COVID-19 pandemic has caused sweeping economic changes. Many people have lost their jobs, and others have had their jobs put on hold or had their salaries reduced. A lot of people are not able to make ends meet, and they are relying on sources like credit cards to get them through it.

Unfortunately, what we’re likely to see once this is all over is a surge in bankruptcy filings. The best thing you can do now is to make some changes to your finances to weather the storm and hope that things will improve soon. Here are a few measures you can take now to try to reduce your financial problems:

Worried woman checking her wallet in grocery store during covid 19 pandemic

File for Unemployment

If you are among the many who have lost their jobs during the pandemic, you should file for unemployment benefits as soon as possible. There is a delay in processing these claims because of the overwhelming number of cases and because of the restrictions on people in the workplace.

File for benefits as quickly as possible so you can start getting the financial assistance you need. You won’t get the full salary you once enjoyed, but you’ll get some money that can help you (hopefully) stay afloat and avoid incurring more debt.

Negotiate with Creditors

You may be doing a good job of restricting your credit card use during this time, but you may have a large credit card balance from before your financial troubles began. You may be able to negotiate new payment terms with your creditors, such as a lower interest rate or a temporary lower monthly payment.

Some creditors may be more willing to work with you than others. Just be polite and persistent. As a last resort, you can always gently remind them that if they don’t work with you, the next notice they may get may be from a Gilbert bankruptcy attorney.

Seek Forbearance on Student Loans

If you are still paying student loans, you should call your loan provider and ask for a deferral. Most student loan providers are quite willing to defer loan payments six months or more or to lower your payment.
If you get to the end of the six months and find that you are still struggling, call and ask for another deferral. You can use the money to pay for other bills. However, know that you shouldn’t just stop paying your student loans. You will not be able to discharge them in a bankruptcy, and the government will come to collect. Failing to pay your loans will also destroy your credit, while getting a forbearance will not.

Prioritize Payments

You may find that even with your best efforts, you just aren’t able to pay all your bills each month. If that’s the case, you should prioritize your payments so that the most important bills are taken care of each month.

Of course, your rent and your mortgage should be the top priority. If you are renting and fall behind, you can be evicted quite easily. If you are paying a mortgage, the bank can move to foreclosure proceedings quickly. You can file Mesa Chapter 13 bankruptcy to rescue your home from foreclosure, but it’s better to take proactive measures before things reach that stage. Credit cards should be at the bottom of your list of priorities for payments since these are unsecured, and creditors cannot seize your assets to satisfy the debt. Credit card debt can also be easily discharged through a Chapter 7 bankruptcy filing in Mesa.

Know that if you are struggling right now, there are many other people who are struggling with you. Do what you can to weather the storm by making some of the changes to manage your finances. Know also that debt relief is available through bankruptcy if and when you need it.

Talk to a bankruptcy attorney at My AZ Lawyers about what kind of debt relief is possible through bankruptcy protection. We handle both business and individual bankruptcies, including Chapter 7 bankruptcy and Chapter 13 bankruptcy. We’ll help you understand the options and how you can get maximum debt relief. We serve clients throughout Phoenix, Mesa, Tucson, and Glendale. Call us today to talk with a bankruptcy lawyer and to learn more.

Arizona Offices:

Mesa Location:
1731 West Baseline Rd., Suite #100
Mesa, AZ 85202

Office: (480) 448-9800

Glendale Location:
20325 N 51st Avenue Suite #134, Building 5
Glendale, AZ 85308

Office: (602) 509-0955

Tucson Location:
2 East Congress St., Suite #900-6A
Tucson, AZ 85701

Office: (520) 441-1450

Avondale Location:
12725 W. Indian School Rd., Ste E, #101
Avondale, AZ 85392

Office: (623) 469-6603

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