For people in Maryland and throughout the nation, there will be a sense of relief when society returns to some semblance of normalcy. Having been forced to adapt in a seemingly endless number of ways with children unable to go to school in person, work schedules changed dramatically, job loss and financial challenges, the potential end of the health crisis will be welcome. Still, there will be issues that people must face. Financial problems could come to the forefront and debtors may need to consider their options. This is especially true for renters.
Eviction moratorium for unpaid rent set to end and financial concerns may arise
Those who were dealing with a reduction in income or lost their jobs but still had rent to pay while the health situation was in progress avoided being evicted due to government intervention. With renters still obligated to pay back what they owe, they might be forced to consider how they will address this financial crunch with bankruptcy a viable option. In general, a renter cannot file for bankruptcy to keep from being evicted without a plan to pay what is owed. If the renter surrenders the lease, the eviction can take longer and allow the debtor to keep from paying the accrued rent.
By the end of April, around 7 million people in the U.S. said they were behind on their rent. Another 5 million expected to have trouble making their payments. Bankruptcy is generally not used by renters for the sole purpose of clearing past due rent, but the federal and state protections that prevented a flood of evictions may open the door to people who cannot pay and would otherwise not have been able to use bankruptcy to clear their debt. Rent is just one debt that these people likely accrued as lost income and medical expenses could have led to a spike in credit card debt and falling behind on other payments. A Chapter 7 liquidation or a Chapter 13 payment plan could help their finances.
For assistance with overwhelming debt, bankruptcy might be the way forward
The changes to the rules regarding renters being able to file for bankruptcy may not last forever and if that is the major financial concern, it might be something to explore. As for other debts like mortgages, credit cards, medical expenses and more, it is wise to think about bankruptcy. The freedom of no longer needing to worry about constant phone calls and messages from debt collectors as well as having a fresh financial start can be beneficial. Having advice from those experienced in the process may be useful to make an informed decision.