Coronavirus and Bankruptcy: Know Your Options

Everyone is struggling in these uncertain times of COVID-19. Unfortunately, some side effects of this global pandemic are layoffs and decreased revenue for small businesses, which can result in mounting debt as you try to keep your head above water. It can feel overwhelming.

If you find yourself with mounting debt and no foreseeable way to pay it back, one option may be bankruptcy.

No one wants to file for bankruptcy. But if you are one of the millions laid off or your small business is struggling because of the Coronavirus outbreak, bankruptcy may be a reasonable course of action. Bankruptcy can give you a sense of control during this unpredictable time and, if necessary, help get you back on your feet financially.

Sometimes filing for bankruptcy is inevitable. If you cannot find a clear financial pathway through the Coronavirus outbreak after your layoff or loss of business income, bankruptcy may be your best course of action. If you qualify, the sooner you file, the faster you will rebuild your credit and get back on track.

If you are an individual and you meet the “means test”, you can file for Chapter 7 Bankruptcy—which after a period of 4 months would wipe out all eligible debt.

If you are a small business, you can file for Chapter 5 Bankruptcy—and similarly wipe out all eligible debt.

If you do not meet the means test, a reorganization of your debt (negotiating a payment plan) through a Chapter 11 Bankruptcy may be an alternative. Under Chapter 11, if you pay your creditors according to the plan, after a period not to exceed 60 months, any remaining debt would be wiped out.

We are in uncertain, and challenging times. Call or text us at 703-687-6188 to discuss if bankruptcy may help you come out of these uncharted waters financially healthy and headed in the right direction.

The Geller Law Group practices Bankruptcy Law and is considered a debt relief agency by federal law. We help individuals and businesses file for bankruptcy relief under the Bankruptcy Code. The Geller Law Group can assist individuals located in Maryland, DC, and Northern Virginia, including bankruptcy matters in Alexandria, Fairfax County, Arlington County, Prince William County, and Loudoun County.