Solving Debt Problems Caused By The Pandemic

Solving Debt Problems Caused By The Pandemic

The COVID-18 pandemic caused the unemployment of hundreds of thousands of people. This has resulted in burdensome financial problems for American workers, even those in Utah and elsewhere who have returned to work. Federal stimulus payments, unemployment benefits, and other relief has helped fill the gap to some extent. However, there are ways to get you through these tough times.

The loss of a regular and dependable source of income affects your ability to pay rent, buy groceries, and gas, as well as purchase other important items necessary for everyday life. It also affects your ability to pay credit card accounts, medical bills, and other debt payments due monthly.

The moratoriums and relief plans implemented by many creditors such as mortgage servicers, auto lenders, student loan servicers, and credit card companies provided some assistance to individuals financially affected by the pandemic. Some landlords even made concessions to their tenants. Many of these assistance programs recently ended when it seemed that coronavirus cases were down due to vaccinations becoming available. What happens next as the virus surges in many parts of the country is uncertain.

Based on the extent of your unemployment, you may be facing problems paying all your monthly debts. Paying your monthly housing payment whether you are a homeowner or renter, should be your highest priority. If you are facing a foreclosure, filing a Chapter 13 bankruptcy case can stop the foreclosure sale. You can file a plan of reorganization that includes repaying your mortgage arrearages.

Tools are available for helping you meet your obligation to pay your mortgage. You can apply for a loan modification. This can lower your interest rate and your monthly payment. Some mortgage servicers are willing to tack missed payments onto the back of the loan which will make you current. Contact your mortgage servicer directly to learn more about loan modifications and other options for bringing your loan current. Unfortunately, landlords are typically in less of a position to help you than mortgage servicers.

If you have good credit, you may be able to refinance an auto loan. This can lower your monthly payment and interest rate, as well as bring you current. However, most car creditors tend to be impatient in the situation where a borrower falls behind on monthly payments. They will protect their interest in their collateral and move quickly to initiate repossession procedures after only a few missed payments. If your car gets repossessed, filing either a Chapter 7 or Chapter 13 bankruptcy case can force your car lender to return your car and buy you some time to find a solution.

Paying credit cards and other unsecured creditors should be your lowest priority. However, if you fail to pay them for more than a few months, expect them to be referred to a collection agency. At some point, these creditors may sue you. If awarded a judgment, they can garnish your wages and bank account. In any of the above circumstances, you may need to consult with an attorney to determine the best course of action. Filing bankruptcy can stop a creditor from initiating or continuing a lawsuit.

The Morrison Law Group has remained open throughout the pandemic to serve the residents of the state of Utah. We have maintained our professional commitment to past, present, and future clients. In the summer of 2021, bankruptcy remains a sensible and effective option for any Utah resident to obtain a financial fresh start. To discuss and determine your options for filing bankruptcy, contact the experienced attorneys at the Morrison Law Group. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, Orem, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.


Theron Morrison

Theron Morrison

Utah’s top bankruptcy and consumer protection attorney.