Covid-19 Presents a few Financial Benefits
Video Transcribed: Oklahoma City attorney Edward Kelley with 1-888-Debtline answering your bankruptcy questions. We’re on day two of our continuing series, I’ve done several of these I’m going to keep doing it, on the silver lining of the Corona virus pandemic why this may be the best time to file your chapter seven or chapter 13.
Last time we talked about the stimulus. Now this may give you the ability to hire a bankruptcy attorney at a time you wouldn’t think you could. Today we’re going to talk about how your lowered income or loss of a job may help you qualify to do a chapter seven when you wouldn’t normally or give you a much lower payment in a chapter 13 then you would have had before this crisis.
So, it’s terrible you lose your job or, your hours are cut, you’re forced to work from home and work much less than you were, not a great thing but here’s the silver lining. Let’s say for example in Oklahoma for a family of one upper $40,000 range is the cutoff to file a chapter seven bankruptcy so maybe you’re a little bit over that or hovering at that amount.
So, this loss of income to which the U.S. trustees office who reexamines filed bankruptcies are being very sensitive and forgiving about may have put you under or put you close enough that you can qualify for that seven. If your income is uncertain going forward there are means within a chapter seven filing to take that into account. And again, everyone knows that this is no joke so they’re being forgiving with you and taking it seriously.
Chapter 13, I’ve talked about this in other series your payment monthly, which you have to make for five years and you normally do a 13 if you make far too much for a seven, is based on what you can pay not at all on what you owe. So again, if your income has gone down, hours cut, forced to work from home, no end in sight, total uncertainty, this is the time to calculate your disposable income.
It may be much lower and then you’ll have a much lower monthly payment for the next five years. You take a $200 payment for 60 months which is five years versus a $100 payment, maybe you’re down to that now, you’ve just decreased by half what you’ve got to pay over five years thousands and thousands of dollars. If your payment’s higher the savings are going to be even more.
So reason number two to file now you’ve got a window where your income is legitimately down and we don’t know what’s going to happen, let’s say and of course we all hope things are going to get better quickly but if they do you’ve lost that window.
You’re back to the income where you were and you may not qualify for that seven, your payment may be much higher for that chapter 13. So, reason number two the silver lining behind the current pandemic. And we’ll have another reason tomorrow in our next video. As always you can reach me at 1-888-Debtline.