A large number of people will feel the impact of the coronavirus “COVID-19” crisis reflected in their bank balance. The closure of places where people congregate will cause lost income, while daily expenses such as utility bills, rent/mortgages and food continue. Missed work and medical bills will lead a number of people into financial trouble.

Unless you invented the virus, you are not to blame for your financial troubles, so don’t feel guilty about the financial effects of this national illness in your personal life. If you remain healthy during this global pandemic and suffer financially, it is time to consider the remedy of Bankruptcy. Avoiding bankruptcy at all costs may dig you into a deeper financial pit.

I encourage you to take an honest look at your situation and educate yourself on the good and the bad of your decision to file or not to file a bankruptcy for debt relief.

When you file bankruptcy, the loans and credit cards that caused your credit score to plummet are gone. You create a new credit record, post-bankruptcy, timely payments on your auto loan, or new credit loan(s). A Chapter 7 Bankruptcy remains on your credit report for 10 years, a Chapter 13 Bankruptcy remains on your credit report for 7 years. On-time payments overcome a bankruptcy ding. Handle your fresh start wisely to increase your credit score and financial future.

How much does your current vehicle cost for repairs, maintenance, and fuel? There are car dealers with good interest rate loans for low maintenance and low fuel consumption vehicles. You can purchase a new car, reduce your monthly expenses so you can stay on budget. Some car dealers handle the return of your old vehicle to the old lender (I call these care dealers).

You dream of buying a home but student loans or tax debts keep you from saving for a down payment. Create a post-bankruptcy budget with a reasonable savings plan that pays tax debt and student loans. Stick with it and you will be able to purchase big-ticket items with low-interest rates within a few years of your discharge.

Are you going to need more than social security to cover your living expenses when you are old and unable to work? What is the cost of repaying creditors instead of building your retirement savings? Crunch the numbers.

Let’s say you are 25 years old and work out a payment arrangement with your creditors to pay $300 a month for 5 years. The total you pay your creditors is $18,000 but the cost to your retirement is over $1,000,000, if you retire at age 70, and adjusting for inflation receive a 10% the approximate return on your retirement you have lost $1,247,526 in income to live on.

Still feeling guilty about asking for a bankruptcy remedy for the financial pit you did not cause? In studies, Economists state “We show that insolvent individuals who do not go bankrupt exhibit more financial stress than those who do . . .” The source is the Federal Reserve Bank of New York online publication, Liberty Street Economics at https://libertystreeteconomics.newyorkfed.org/2015/02/insolvency-after-the-2005-bankruptcy-reform.html

Bankruptcy is biblical, check out my blog article “I have heard that many people say that Bankruptcy represents a personal, even moral failure. That only bad people file for bankruptcy. Have you heard that before?” Posted October 4, 2016.

Be sure and weigh all the factors before you decide it is nobler to not file bankruptcy and dig a deeper financial pit for yourself and your family, all because of events out of your control.