How to Figure Out if Bankruptcy Makes Sense Because of COVID

In the past few months, the United States has experienced unprecedented job losses due to the Covid-19 pandemic.

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Stay at home or closure orders have shuttered businesses, raised the unemployment rate to higher levels than seen in the 2008-2009 recession and left many wondering how they are going to pay their bills.

As Bloomberg reports, many analysts are predicting a wave of bankruptcies flooding courtrooms throughout the nation as a result of the economic turmoil caused by this crisis.

If your finances have been affected by job loss or reduced income due to Covid-19, the chart below will be helpful in deciding whether filing for bankruptcy will be beneficial to your specific circumstances.

There are three chapters of bankruptcy that most individuals will file under, Chapters 7, 11, and 13.

Each chapter has different requirements and will produce different results, ranging from total liquidation of one’s assets and discharge of all eligible debt to develop a repayment plan that will allow an individual to get current on debt payments over the course of several years while retaining all of their property.

Answer the questions below and follow the arrows to the bankruptcy chapter best suited to your specific financial circumstances.

Infographic about if you should file bankruptcy as a result of COVID-19