Priorities and Assistance
Your first priority is to keep yourself and your family healthy and safe. Most public health officials are recommending having a 2-week supply of food and medicine for your family (and pets!). Remember that we all are in this together so please don't hoard more than you need. If you need to use credit cards to buy necessities because you have had an interruption or reduction of income, then do so: no one expects you to forego food, medicine, or shelter.
If you or a loved one gets sick, or if you are laid off, furloughed, or have your hours reduced as a result of the pandemic, the State of California has authorized the EDD to immediately provide disability and unemployment benefits. You can apply for benefits at the EDD website. (https://edd.ca.gov/about_edd/coronavirus-2019.htm)
Although all public school classes have been suspended, many schools remain open to provide free lunch to children 18 years and younger, no questions asked. The San Diego Union-Tribune is maintaining a list of locations. https://www.sandiegouniontribune.com/news/education/story/2020-03-14/heres-where-you-can-find-free-meals-for-children-during-this-weeks-school-closures
It now appears that the IRS has announced that 2019 taxes will not have to be paid until July 15, 2020. Federal tax returns are still due on April 15; the extension is only for the payment of any taxes owed. The state of California has extended the due date for returns and payments to June 15, 2020. Please confirm any changes with your tax professional.
Your Actions Should be Proactive and Cautious
I understand that many people and businesses will have their finances significantly disrupted by this emergency, and that as a result they may be unable to maintain payments on their debts. It may be that bankruptcy will be a part of the solution to these financial difficulties. However, future developments are still very difficult to predict. The Federal, State, and Local governments are providing various services and assistance that may address any temporary concern. It’s important to keep options open while we wait and see how events develop.
Don’t ignore warning signs. If you are not going to be able to pay all of your bills, be proactive and reach out to creditors. Auto lenders, mortgage servicers, student loan creditors, credit card companies, and utility companies are all instituting programs in response to the present emergency. Reach out to them and ask for forbearance. Keep these communications in writing! It might be extremely important to have a record of any promises a lender or creditor has made to you.
Regarding Your Mortgage: If you believe that you are going to have difficulty paying your mortgage, reach out to your servicer. Search the name of your mortgage servicer with the words "loss mitigation forbearance". I encourage you to begin this process as soon as you have concerns - in the best of times these departments are slow to respond so I would expect them to be under high load now. be prepared to provide copies of bank statements and tax returns.
Your retirement accounts are a last resort! Please think very carefully before withdrawing from or borrowing against an IRA, 401(k), or similar retirement account. Once that money is spent, it is gone, and it may take years to rebuild that nest egg. Any withdrawals might have tax consequences down the road, costing you even more money. Additionally, money in these accounts is almost always completely protected in the event that you file for bankruptcy. If you think there is any chance that you may file for bankruptcy in the future, please contact me before risking your retirement funds.
I remain open for business and I am continuing to process cases. Please understand that as a result of the present emergency some matters require additional priority and effort. Please be patient with any delays and be assured that I will continue to serve you and your case needs in an appropriate timely fashion.
Please Note: As of March 16, 2020, all "341 Meetings" scheduled prior to April 10, 2020 have been postponed. New dates have not been set at this time. I will provide additional information as soon as it is available.
If you are presently in a Chapter 13 and expect you are going to be unable to make your plan payment, please contact me immediately so that we can make appropriate arrangements.
Take care of yourself, your family, your friends, and your neighbors. Stay safe and stay healthy.