The current shift in the economy was sudden, unexpected, and indiscriminately harsh on a lot of families that didn't see it coming. Whether you were prepared or not, this downward shift in the economy has caught us all by surprise, not unlike the Great Recession that began 2007.
This time however, the shift was caused by external forces powered by the global Covid-19 pandemic and oil trade wars between OPEC member nations. But the cause really doesn't matter if the result is a loss or reduction in your employment.
If your family is like most others, its likely you have lived paycheck to paycheck due to the high cost of living throughout California. This is especially true for affluent Sacramento suburbs like Rocklin or Roseville, or centrally situated cities like Fairfield and Vacaville. This loss may have you feeling like there are no alternatives, but there are.
The economic stimulus package recently signed into law represents the single largest of its kind in American History. Its massive price tag of $2.2 Trillion has most of us wondering how we will every truly recover from such debt. And equally as important, whether the stimulus checks we are set to receive will be enough to carry us through this shift. If you completely lost employment due to it, it's unlikely to be the safety net you were hoping.
It doesn't mean you are or should ever feel hopeless. It is a great opportunity to reevaluate what is necessary, and what can be cut. But if making any such cuts still leaves you short, there are still some things you can do to lessen the load.
If you have a mortgage owned by certain mortgage entities, you are likely eligible for a forbearance on your mortgage payments, thus temporarily eliminating what is usually your largest monthly bill. In additions, landlords in many states, including California, will be unable to evict delinquent tenants during the stay at home order, thus providing similar benefits if you don't own your home. In addition, many other types of creditors are also likely to negotiate alternative payment arraignments to ensure the loan doesn't go in default.
However, if making those changes still leave you short each month, you always have the bankruptcy code to fall back on to alleviate the burden. Our Nation's Founding Fathers foresaw that shifts in economic prosperity could negatively affect us and provided constitutional powers to Congress to form bankruptcy laws to protect us. They saw the importance of protecting consumers even then.
Bankruptcy gives you the opportunity to either eliminate your dischargeable debt through a Chapter 7 bankruptcy, or to create an affordable payment plan through a Chapter 13 bankruptcy. Whether a chapter 7 or chapter 13 is right for you is something you should discuss with a bankruptcy attorney.
After the Great Recession, bankruptcy is no longer frowned upon. Everyone saw the importance it has in giving people the opportunity to get back on their feet. It gives you the opportunity to thrive again, rather than continue to suffer from an insurmountable debt load.
If you are feeling an overwhelming burden from this shift in the economy, know that you aren't alone, and most certainly aren't without options. Prior to becoming a bankruptcy attorney, I spent 16 years in the mortgage and real estate industry helping people management and improve their credit. I'm uniquely qualified to help you get through this as well.
Give my office a call and let's work together to figure out how to get you through this economic downturn.