How to Manage COVID-19 Debt

The COVID-19 pandemic has impacted us all in different ways, and many households are feeling financial pressure due to underemployment or unemployment, medical bills, childcare issues, and more. If you have fallen behind on your bills or are relying on credit cards just to get by, you are not alone. However, many people will continue to struggle when it comes to managing the debt they accrued due to COVID-19. 

Relief Programs

First and foremost, ensure you are aware and taking advantage of every program set forth by the federal or state government. For example, almost all federal student loan payments are suspended until at lead September 30, 2021, and interest will not accrue. Any collection actions for student loans in default, such as wage garnishments, are also suspended. 

Homeowners with federally-backed mortgages might qualify for a COVID-19 forbearance, and private lenders might also work with you on possible solutions. The federal government also extended the eviction moratorium until at least March 31, 2021, so that takes some pressure off of renters for the time being. Indiana is one of many states that prohibited utility shut-offs for now, as well.

Several major credit card companies launched programs with options for cardholders, including forbearance on collections, possible skipped payments or increases in credit lines. 

Facing Your Debts Post-Pandemic

With vaccination rates increasing across the United States, the end of the pandemic is now in sight, as is the end of many financial relief programs. There will soon come the day when your creditors will not offer relief any further, and you will need to face your debts. For many people, this will involve credit card balances, past-due rent, and more that will be difficult to pay off. 

Discussing your situation with an experienced debt relief and bankruptcy attorney can help you learn about your options. If your debts seem insurmountable, filing for bankruptcy might be your best option. In fact, bankruptcy cases have already increased since the start of the pandemic and are expected to continue increasing throughout 2021. 

How Bankruptcy Can Help

Chapter 7 bankruptcy is a common legal solution for consumers with overwhelming unsecured debt. A successful bankruptcy case can immediately halt all collection activity, as well as end with the discharge of your:

• Credit cards balances
• Personal loans
• Loans from friends or family members
• Medical bills
• Most legal judgments
• Past-due rent and utility bills
• Other qualified debts

While Chapter 7 might not wipe out all of your debts, it can eliminate many of them, which allows you to focus on the remaining debts, such as your mortgage or car loan. This process helps many people find relief from crushing debt and take back control of their finances. 

Consult with an Indiana Bankruptcy Lawyer About Your Options

At Whitten & Whitten our legal team knows that the pandemic and the financial fallout have hit many Indiana families hard. We are here to help you explore your options for relief, including a possible bankruptcy case. Contact us for more information today.