Covid 19/ Coronavirus and bankruptcy, how to preserve your resources

The Covid 19/Coronavirus outbreak has been upgraded to a pandemic. We have been ordered by the city and state to shelter in place. Schools, churches and many businesses have closed.  Many are losing pay and have bills piling up.   Most Americans don’t have adequate savings to get them through this tough time.  Let’s not even talk about the stock market.

We need to turn to each other for strength. Let’s  support each other as we all navigate this brave new world together.

Here is some basic free financial advice about what to do and not to do during this time.

Do NOT cash out retirement accounts.

DO prioritize payments to creditors carefully. Food and bare essentials first. Then basic housing expenses.

But first reach out to your landlord and see if you can ask for an extension on rent if necessary.

If you have a mortgage, immediately go online to their loss mitigation options. They probably have a new link for forebearance/type payment plans or options.

Reach out to utility companies-and ask for a hardship extension on payments. Again, their websites likely have new resources for people.

Lost your job? Immediately apply for unemployment benefits online. Ask about short term insurance payments if you have any. Have a whole life insurance policy? Check your cash surrender value.

Student loan payments should immediately be deferred or placed on forbearance during this time if possible. Try to keep a basic cash savings of minimum $1,000 for emergencies.

Do NOT pay any medical bills from BIG hospitals in full. Immediately request a payment plan.

Tickets from the city? Call and ask for an extension of time to pay fines and tickets. This also applies to court fines.

Tolls owed to the tollway authority? Apply for a hardship settlement.

Owe the IRS? Call the taxpayer advocate center and immediately submit hardship documents showing that payments to the IRS will make it impossible for you to maintain a minimum standard of living. Same with state tax debt.

Credit cards come last. They should not be a priority unless your basic living expenses are met. Ask for payment deferments but expect all lines of credit to be shut down quickly.

Finally, ask for help. Ask questions, stay INDOORS and stay safe.

Focus on family and friends and above all prioritize kindness and compassion to others.

Chapter 7 bankruptcy can help if these debts are spiraling out of control.  Hopefully the shelter in place will be over soon, but the impact could go on for some time.  A bankruptcy can help get you back to square one. 

If you need help catching up on your mortgage or car payment, a chapter 13 can help you do that.  It is a 3-5 year repayment plan, so it allows you to pay your regular monthly expenses as well.

I offer free phone and video  consultations in this time of quarantines, so you can get advice from the safety of your own home.  Call, email, or submit a request here for a free discussion about your situation. I’m happy to help. Stay safe. Terry Leeders

 

Chicago resources

1. Apply for unemployment benefits: https://www2.illinois.gov/ides/Pages/default.aspx

2. Navigate the SBA site for additional help: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

3. Facebook has announced a Facebook Small Business Grants Program that you can apply for: https://www.facebook.com/business/boost/grants

4. General advice from the consumer protection bureau: https://www.consumerfinance.gov/about-us/blog/protect-yourself-financially-from-impact-of-coronavirus/

5. IRS tax relief help including a NEW tax deadline of July 15th: https://www.irs.gov/coronavirus

6. Information from Navient for student loan relief: https://navient.com/covid-19

7. General student loan relief information: https://www.forbes.com/sites/adamminsky/2020/03/17/how-to-manage-your-student-loans-in-the-coronavirus-crisis/?fbclid=IwAR2vwotoxAwY4meq-srNXtBiESe5KitRWQNNfaZe8XkEpfornLGQDCTHUEM#59710f6f7b54

8. Bartender Emergency Assistance Program: https://www.usbgfoundation.org/beap?fbclid=IwAR254kvmSWeW1WGp-M_Jyx3n3cFp0RiHN9IoFLBmArIxgFYrYShPTijARgs

9. Emergency Rental assistance from the City of Chicago: https://www.chicago.gov/city/en/depts/fss/provdrs/serv/svcs/how_to_find_rentalassistanceinchicago.html?fbclid=IwAR3KBFQUt9dLJwNk8IivJIP9XesU5QF5WWhR8WXBH_a5XqnQ4ZZGgL49FJQ

10. Illinois Domestic Violence hotline: https://the-network.org/get-help-dva/

11. Recommendations from the CDC on how to protect yourself from the COVID-19 virus: https://www.cdc.gov/coronavirus/2019-ncov/index.html

12. A good list of resources from the Illinois Health and Hospital Association: https://www.team-iha.org/quality-and-safety/emergency-preparedness/novel-coronavirus-(2019-ncov)

13. The City of Chicago press release on the Coronavirus with many links to other resouces: https://www.chicago.gov/city/en/sites/covid-19/home.html

14. A very important link from Chicago Public Schools (CPS) with resources for kids to do work while out of school: https://cps.edu/oshw/Pages/HealthyCPS.aspx (click on Enrichment Learning Resources) direct link with packets for every grade: https://cps.edu/OSHW/Pages/EnrichmentLearningResources.aspx

15. The most up to date statistics on the Coronavirus here in Illinois: http://www.dph.illinois.gov/topics-services/diseases-and-conditions/diseases-a-z-list/coronavirus

16. Here is a State of Illinois COVID-19 household checklist to prepare your home for an outbreak: http://www.dph.illinois.gov/sites/default/files/COVID-19_HouseholdChecklist20200309.pdf

17. State of Illinois Childcare assistance programs: http://www.dhs.state.il.us/page.aspx?item=30355

18. Look into Nicor Gas Energy Assistance programs: https://www.nicorgas.com/residential/billingandpaymentoptions/energy-assistance-programs.html

19. Apply for Financial and energy assistance on the Peoples Gas site: https://accel.peoplesgasdelivery.com/home/assistance.aspx

And finally, remember that YOU can also volunteer to help others! Drop off a meal for an elderly neighbor, videochat with friends and family during this time, take long walks, do some yoga at home, or donate blood!

Most importantly, let’s be kind to one another during this hard time.

Shared with permission from Claudia Badillo

About Author

Terrance Leeders

Chicago Bankruptcy Attorney, husband, father, Cubs fan.

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