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May 11,2021

How to Manage COVID-19 Debt

COVID-19 has had a harsh effect not only on physical health, but it has also wreaked havoc on the finances of Salinas households. Many have struggled to keep their heads above water with creditors breathing down their necks.

See if You Have Flexibility

Many creditors are willing to work with you if you owe money and are in financial trouble. Some are giving forbearance to give you extra time to pay back debts. Check with the creditor to see if they have a special COVID-19 program with some flexibility.

You can always try to negotiate a payment plan with your creditor. It is in their interest that you are able to repay your debt. If not, they would have to send your debt to collections and pay a large amount to the debt collector. You are not powerless.

Prioritize Your Debts

When money is limited, you sometimes have to choose which debts you focus on first. The ones that have the highest interest rates or are the closest ones to collections should be the ones that you deal with first. If you have to decide between debts, you should push the ones with the lowest interest rates towards the back of the queue. While all debts are pressing, some are more so than others financially speaking when things are tight.

Know Your Legal Rights

Debt collectors do not have an unlimited right to call you whenever they want. Instead, federal law puts limits on what they can do to collect. For example, you can tell them not to call you at work anymore or even at all. Send a letter to the collector and put it in writing if you want them to stop contacting you. If the creditor is harassing or threatening you, contact an attorney to learn how you can file a lawsuit against the creditor.

Be on the Lookout for Scams

When it comes to COVID-19 debt, some fraudulent opportunists are going to all sorts of lengths to take advantage of desperate people. They make promises to make your debt go away, but they are the only ones who end up better off after they have taken you for huge fees or have illegally obtained your personal information.

File Bankruptcy if Necessary

Many people are hesitant to file for bankruptcy for whatever reason. They may think that there are negative connotations. However, situations like COVID-19 are exactly why there are bankruptcy laws on the books. Sometimes, people run into deep financial trouble and need a way out for a fresh start. You will get legal protections from many of your debts and the ability to breathe again. This is something that you should not rule out because sometimes in life, you run out of options.

Experienced Salinas Bankruptcy Attorneys

Contact a bankruptcy attorney at Miranda, Magden & Miranda, LLP online to schedule your initial consultation. We will discuss your legal options and explain to you how a Chapter 7 bankruptcy filing could be what you need to get out from under your crushing debt load.

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