Impacted by COVID? Reorganize Your Finances with Chapter 13 Bankruptcy

One-in-four adults have had trouble paying their bills since the coronavirus outbreak started, so if your finances have been impacted by COVID, you are not alone. In November 2020, 14.8 million people reported being unable to work due to the pandemic, and as emergency support dwindles, more and more Americans are considering bankruptcy. Forbes predicts a ‘bankruptcy tidal wave’ as early as January 2021.

Choosing to File

The thought of filing for bankruptcy can be a scary proposition, and most people see it, rightly so, as a last resort. In these uncertain times, however, bankruptcy may be the best option to get your finances back on track. If you have fallen behind on your mortgage or car payments due to the coronavirus crisis, a Chapter 13 reorganization plan can help protect you from foreclosure or repossession while reducing your monthly payment obligations.

How Chapter 13 Bankruptcy Works

According to the United States Courts:

A Chapter 13 bankruptcy is also called a wage earner’s plan [and] enables individuals with regular income to develop a plan to repay all or part of their debts.” If you file for Chapter 13 bankruptcy, you will work with your attorney and the courts to develop a repayment plan that lasts for 3 to 5 years. During this time, you will make regular payments based on your income, and an appointed trustee will distribute the funds to your creditors. Even if you are unable to pay off your debts, they will be absolved at the end of the bankruptcy process.

Creditors are not allowed to begin or continue collection efforts during Chapter 13 bankruptcy, and you will have the opportunity to save your home from foreclosure. You can also use your plan to extend other debts (like car payments) and keep important assets from being repossessed.


All individuals with less than $394,725 in unsecured debts (debts not attached to assets) and less than $1,184,200 in secured debts (like mortgages) are eligible for Chapter 13 protection under 11 U.S.C. § 109(e). Nevertheless, you should explore all your options before filing for bankruptcy.

If you need legal guidance or all else fails and you are ready to file, Loftin, Loftin & May is ready to help. We can help you decide if a Chapter 13 bankruptcy is the best choice for you during a free consultation.

Put over 40 years of experience on your side and contact us at (334) 310-0208
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