Attorneys across the country have been experiencing unusually high call volumes during the pandemic (including on weekends and even late at night) filled with alarming urgency to file for bankruptcy. The voices on the other ends of the lines are scared and even panicked.

Why the Sudden Rush to Inquire About Bankruptcy?

Currently, it’s conservatively estimated that 8 million Americans are claiming unemployment, but that number rose to 40 million or 25% of Americans out of work during the pandemic. Many jobs were also permanently lost due to the pandemic. The outrageous and troublesome unemployment and job loss numbers came with many other consequences and effects, including Americans feeling significant losses in their bank accounts.

The amount of people filing for bankruptcy may set record highs this year and the pandemic is the most likely reason behind our sick and suffering economy. Still, many other symptoms accompany it, like shutdowns and supply chain issues. In fact, financial professionals and analysts have been predicting another possible surge in bankruptcy filings.

Economists, news anchors, and radio hosts have all been discussing inflation hitting a 30 year high, and nearly everybody is feeling its consequences, whether at the gas pump, bank, or grocery store. A bankruptcy tidal wave began in 2020, but as Covid-19 relief reached Americans, those numbers started to decline slightly; however, now, with no further assistance in sight, many Americans face an overwhelming reality; bankruptcy. Filing for bankruptcy can be confusing, especially when trying to file alone and conclude which form of bankruptcy is appropriate.

Understanding Your Options – Because You Do Have Options

There are a few options when one faces situations where their debt is not only accumulating but spiraling out of control. The first option could be keeping up with paying the minimum on all your bills while struggling financially. Unfortunately, staying current on your payments usually doesn’t last very long if you simply don’t have enough money coming in to keep you afloat. These days it’s especially trying when living expenses are only getting higher due to that 30-year inflation high and all the other pandemic-related economic hardships mentioned above.

The next option for some might be toughing it out until, hopefully, things pick back up again or reaching out to family and friends for financial help or a way to save on some bills. However, these options can be harder to come by since many people are stretched a little thin. It can also be incredibly stressful to hold tight and tough it out if you have multiple debts and debt collectors calling you and mailing you.

Another option might be to try to negotiate some settlement with creditors or lenders, although this may not be an option without money (or a job in many cases today) to back up your words. Additionally, once you get a new job, you may find your debt catching up with you at work. Your wages may get garnished just as you might finally be getting your head above the water.

A lawyer fluent in the bankruptcy code can help you determine the right path forward, whether that’s filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. These two types of bankruptcies are very diverse, and each has further qualifications.

A Boulder bankruptcy attorney at The Moorhead Law Group can advise you on how to distinguish what type of bankruptcy you are more likely to require (and qualify for) by looking over your financial records and studying your own unique set of circumstances. For example, some people may be eligible to bypass what is known as bankruptcy or income means test (usually veterans and people with mainly business debts); however, most people will need to take the test. The means test is often regarded as the most complicated element when filing bankruptcy.