Bankruptcy Surge More Likely to Occur in 2022
During the early stages of the COVID-19 pandemic, commentators and experts in the bankruptcy law field considered the possibility of a surge in consumer bankruptcy cases due to unemployment and mounting debt. Yet with extended unemployment benefits, stimulus checks, student loan forbearances, an eviction moratorium, and mortgage forbearances, many consumers have not faced the kind of financial fallout from the pandemic that was initially expected to occur relatively quickly. However, according to a recent NPR report, a mass move toward bankruptcy filings may be more likely in 2022. It is important for consumers to know about their options, including bankruptcy, and to understand whether personal bankruptcy could be an option for you and whether Chapter 7 or Chapter 13 bankruptcy is the better fit for your needs and circumstances.
New Year Could See a “Flood” of Consumer Bankruptcy Filings
The COVID-19 pandemic is not over, yet many people remain out of work. Moreover, in some cases, working conditions simply are not what they were prior to the pandemic, and as a result many workers have not returned to pre-pandemic salaries even if they have returned to work after a furlough or a temporary remote working situation. However, most of the protections that the federal government provided to consumers during the pandemic have ended. Indeed, no more stimulus payments are coming, federal student loans are set to resume after January 31, 2022, and the eviction moratorium has come to an end.
According to the NPR report, the Consumer Financial Protection Bureau (CFPB) did “put new rules into place to curb foreclosure,” preventing mortgage servicers from beginning the foreclosure process unless a homeowner is more than 120 days late on mortgage payments. Yet even that new rule is finite and has not been extended into 2022. As a result of joblessness, significant debts that piled up during the pandemic when consumers were unemployed, the continued difficult working conditions associated with COVID-19, and the serious medical conditions associated with the coronavirus, a “flood” of bankruptcy filings could be on the horizon in the near year.
Americans across the country are still suffering from COVID-19 infections, and many are dealing with “long COVID,” preventing them from returning to work in any capacity or preventing a full-time return to pre-pandemic work duties. For many of those Americans, medical debt may be the primary reason to file for consumer bankruptcy.
Understanding Different Types of Bankruptcy
Depending upon a debtor’s reasons for filing for bankruptcy, as well as the debtor’s employment and financial circumstances, the debtor will likely be planning to file either for Chapter 7 or Chapter 13 bankruptcy.
In pandemic-related bankruptcy filings where a debtor is seeking to discharge eligible debt as quickly as possible in order to get a fresh start, the debtor will likely be seeking a Chapter 7 bankruptcy filing if they can pass the “means test.” Differently, if a debtor is hoping to file for bankruptcy in order to get caught up on mortgage payments and to keep their house, that debtor will need to find out more about their eligibility for Chapter 13 bankruptcy..
Seek Advice From an Oak Park Bankruptcy Attorney
If you have questions about filing for bankruptcy as a result of the pandemic or need advice about your eligibility for Chapter 7 or Chapter 13 bankruptcy, our experienced Oak Park bankruptcy attorneys can assist you. Contact the Emerson Law Firm for more information.
See Related Blog Posts:
Consumer Bankruptcy Should Not be Stigmatized
Am I a Good Candidate for Chapter 13 Bankruptcy?
New Year Could See a “Flood” of Consumer Bankruptcy Filings
The COVID-19 pandemic is not over, yet many people remain out of work. Moreover, in some cases, working conditions simply are not what they were prior to the pandemic, and as a result many workers have not returned to pre-pandemic salaries even if they have returned to work after a furlough or a temporary remote working situation. However, most of the protections that the federal government provided to consumers during the pandemic have ended. Indeed, no more stimulus payments are coming, federal student loans are set to resume after January 31, 2022, and the eviction moratorium has come to an end.
According to the NPR report, the Consumer Financial Protection Bureau (CFPB) did “put new rules into place to curb foreclosure,” preventing mortgage servicers from beginning the foreclosure process unless a homeowner is more than 120 days late on mortgage payments. Yet even that new rule is finite and has not been extended into 2022. As a result of joblessness, significant debts that piled up during the pandemic when consumers were unemployed, the continued difficult working conditions associated with COVID-19, and the serious medical conditions associated with the coronavirus, a “flood” of bankruptcy filings could be on the horizon in the near year.
Americans across the country are still suffering from COVID-19 infections, and many are dealing with “long COVID,” preventing them from returning to work in any capacity or preventing a full-time return to pre-pandemic work duties. For many of those Americans, medical debt may be the primary reason to file for consumer bankruptcy.
Understanding Different Types of Bankruptcy
Depending upon a debtor’s reasons for filing for bankruptcy, as well as the debtor’s employment and financial circumstances, the debtor will likely be planning to file either for Chapter 7 or Chapter 13 bankruptcy.
In pandemic-related bankruptcy filings where a debtor is seeking to discharge eligible debt as quickly as possible in order to get a fresh start, the debtor will likely be seeking a Chapter 7 bankruptcy filing if they can pass the “means test.” Differently, if a debtor is hoping to file for bankruptcy in order to get caught up on mortgage payments and to keep their house, that debtor will need to find out more about their eligibility for Chapter 13 bankruptcy..
Seek Advice From an Oak Park Bankruptcy Attorney
If you have questions about filing for bankruptcy as a result of the pandemic or need advice about your eligibility for Chapter 7 or Chapter 13 bankruptcy, our experienced Oak Park bankruptcy attorneys can assist you. Contact the Emerson Law Firm for more information.
See Related Blog Posts:
Consumer Bankruptcy Should Not be Stigmatized
Am I a Good Candidate for Chapter 13 Bankruptcy?
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