What Do I Do Now That My Bankruptcy is on Hold and I’m Not Working?


Question:

Dear Steve,

I filed chapter 13 bankruptcy June 2019.

Had a meeting of the creditors and only one credit is not one included in the bankruptcy. The hearing dates have been Canceled and rescheduled since November 2019 three times they keep requesting delays Add rescheduling. Our next hearing is scheduled June 11.

As if that wasn’t enough the government now has shut down nonessential businesses. I work for a non-union construction company as a sole proprietor/independent contractor which means no benefits no employment no sick pays no vacation pay no pay

Did the government include any type of provision to those in Chapter 13 bankruptcy who can not make their payments Due to the government shut down of non-essential services?

Stanley

Answer:

Dear Stanley,

The answer to your question is no and/or not yet.

If history is a good educator, I predict most failed Chapter 13 cases will eventually convert to Chapter 7 bankruptcies.

At this point, hope and reality are going to conflict. While you hope this is going to be an orderly situation. It’s just not going to be.

Because of the tremendous issues created with sudden pay loss my best advice at this point is going to be to do nothing. Sounds crazy, right?

The primary need for you is going to be survival until you start getting paid again. That means you will need to stop paying everything you can and default on as much as you can to keep food on your table and lights on.

You will go deeper into whatever debt hole you are in now. That’s just reality.

Once we get out of the other side of this tragedy we can deal with the financial carnage that is left over. For many that will be a Chapter 7 bankruptcy to eliminate their debt quickly and for little money.

Now, there is some reason you filed a Chapter 13 bankruptcy. I don’t know if it was as a result of a. mortgage or something else. But you should feel confident to discuss this with your current bankruptcy attorney.

With a lack of income on the horizon and more defaults to come, this is the time to let all those defaults gather and then deal with this mess at once on the other side.

While my advice may not be pretty, it is certainly honest.

morehelp1


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