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If you have lost your job due to the coronavirus crisis, you are likely in survival mode. Your immediate goal should be to “shelter in place” to protect your health and that of your family. Beyond that, whatever funds you have need to be allocated to food and shelter.But what about transportation? Is your vehicle at risk of repossession even in a time of national emergency? What steps can you take to protect your car or truck?Your first course of action should be to find out how your vehicle lender intends to handle what is likely to be an increase in delinquencies. If you have not done so already, visit your vehicle lender’s website to see if they have any “coronavirus” relief programs in place. Currently, for example, Ford Motor Credit, GM Financial, Toyota Financial Services, Hyundai Finance and others have plans available.Similarly, Georgia’s Own Credit Union, Delta Community Credit Union and others have COVID-19 relief programs.These lenders may ask for documentation of your hardship. If you intend to ask for a deferment, you need to follow their instructions to the letter. And realize that a deferment just means that your loan will be extended. Payments will not be forgiven. And you may be additional interest in exchange for extending your loan.Lenders who serve “higher risk” borrowers, however, may not offer much in the way of help. One such lender, who services a large number of “buy here pay here” loans says on its website: “we understand our customers may be impacted during this time. While we are currently working on a program to help impacted customers, please connect directly with your local dealership and stay in close contact with us regarding any loan payment challenges you may encounter.”You can assume that “buy here pay here” dealerships will be less accommodating. You should also assume that if your payment history has been spotty, your finance company will be less inclined to defer payments.Whatever your dealer or finance company’s intentions, you need to know where you stand.Along those lines you should not hesitate to reach out to the customer service representatives. Vehicle lenders are always concerned that a financially strapped purchaser may disappear with his/her vehicle and the economic disruption caused by the coronavirus will increase this concern. You are always better off maintaining open lines of communication with your vehicle lender.What Should I Do if my Vehicle Lender Will Not Cooperate?Even with deferments and cooperation from your vehicle lender, you will not be able to put off making payments forever. Other lenders may not work with you much at all. What is the worst case scenario?Because cars and trucks are mobile and easily moved, vehicle lenders are allowed by law to use “self help” or repossession to protect their investments. Under Georgia law, a lender can repossess without warning the minute you go into default on your loan.Your installment contract will define what constitutes a “default” – usually loans go into default if they are seven to fourteen days late, although some contracts only look for one day late.Generally speaking the top tier lenders like General Motors, Ford, Toyota, Hyundai, and credit unions like Georgia’s Own or Delta Community will try to contact you about your missed payment before sending out the repossession agent.Third tier lenders and “buy here pay here” dealers will usually skip the notification and move right into repossession.Under Georgia law, a repossession agent cannot breach the peace to pick up a vehicle. This means that he cannot break into your garage or engage in a street brawl to pick up your car. This is why most repossessions occur in the middle of the night or mid-day in your work parking lot.If you take action to block the repossession agent, you could find yourself facing a criminal charge for theft so hiding your vehicle or sitting in the car to stop the repossession is not a good solution.If you conclude that a repossession is inevitable, you should remove your personal property from your car or truck as these items tend to disappear when you vehicle is seized.Once your vehicle is taken it will be stored at an impound lot. Your lender cannot sell your vehicle without first giving you an opportunity to redeem it. By law, your lender must send you a “10 day letter” in which you are given 10 days to pay the balance in full plus costs to get your vehicle back. Once 10 days pass, the finance company is allowed to see your car or truck at auction and your ownership interests cease at that time.Once the vehicle is sold, your lender will apply the proceeds against the remaining balance due under your contract. In many cases the auction price is insufficient to pay off the loan balance – the remaining balance due is called a deficiency claim. Your lender can sue you for this deficiency balance or sell the deficiency account to a debt buyer who can pursue you to collect this debt.We often see large deficiency balances in cases where a vehicle was financed over a long period of time (5 or 6 years) or when someone traded in one vehicle for another rolled the balance due from the first vehicle into the contract for the second.Can Bankruptcy Help?Bankruptcy can stop a repossession. It can also stop the sale of your vehicle. Once your vehicle is sold at auction, however, bankruptcy will not help.If you want to keep your vehicle, Chapter 13 bankruptcy creates a payment plan in which you basically refinance your loan. The idea behind Chapter 13 is that you need a vehicle to get to and from work and that your vehicle is essential to your financial rehabilitation.Chapter 7 can stop a repossession temporarily but it is not designed to help you refinance and keep your vehicle. Chapter 7 will wipe out a deficiency claim.Should You File Bankruptcy if You are Temporarily Out of Work?Generally speaking, I am not a fan of filing bankruptcy when you are facing a temporary financial setback. Bankruptcy assumes a certain level of stability and consistency. If you file bankruptcy – either a Chapter 7 or Chapter 13 – while the economy is on full lockdown, you may have to amend or even dismiss in a month or two if you are suddenly re-employed with overtime.That being said if you are going to look at bankruptcy now, I would be much more inclined to consider Chapter 7 as opposed to Chapter 13.Bankruptcy is an imperfect remedy but it can be appropriate to stop a bad situation from getting worse. Susan Blum and I have represented thousands of honest, hardworking men and women in Atlanta area bankruptcy cases and we’re happy to answer your questions as well.Call us or email us to schedule a free consultation by phone or Skype. We do ask that you fill our brief two-page questionnaire before our virtual meeting so that we can offer you the best advice.The post How to Protect Yourself from Vehicle Repossession In Case of Coronavirus Layoff appeared first on theBKBlog.

$2 Trillion Ear-marked to Help Americans Effected by the Virus, but the Cost Will Far Exceed the Benefit
Coronavirus Stimulus Package F.A.Q.: Checks, Unemployment and More
(summary from New York Times, March 27, 2020, plus other resources).
On March 27, 2020, the President signed a $2 trillion economic relief plan to offer assistance to American households affected by the coronavirus pandemic. This plan includes stimulus payments to individuals, expanded unemployment coverage, student loan changes, different retirement account rules and more.
This summary offers answers to many questions, but please note this is a changing environment and answers may change over time.  The answers below are clips from the full answers in the New York Times article.  I recommend you read the entire article and watch for updates.
Stimulus Payments:

Most adults will get $1,200, although some would get less. For every qualifying child age 16 or under, the payment will be an additional $500.
How many payments will there be? one
How do I know if I will get the full amount? It depends on your income, if you have children, no one claims you as a dependent and have a social security number.  For instance, a married couple with no children earning $150,000 or less will receive a total of $2,400.

Do college students get anything? No if someone claims them as a dependent on a tax return.
What year’s income should I be looking at? 2019 if you already filed a return, otherwise use 2018.
What if my recent income made me ineligible, but I anticipate being eligible because of a loss of income in 2020? Do I get a payment? No.

Will I have to apply to receive a payment? No.
When will the payment arrive? Supposedly in three weeks (bur I would not assume this is accurate).
If my payment doesn’t come soon, how can I be sure that it wasn’t misdirected? You will get notice in the mail a few weeks after your payment was sent.
What if I haven’t filed tax returns recently? Will that affect my ability to receive a payment? Perhaps, so file your returns immediately.
Will most people who are receiving Social Security retirement and disability payments each month also get a stimulus payment? Yes.
Will eligible unemployed people get these stimulus payments? Veterans? Yes and yes.
Will U.S. citizens living abroad get a payment? Yes, with some requirements.
Do I have to pay income taxes on the amount of my payment? No.

If my income tax refunds are currently being garnished because of a student loan default, will this payment be garnished as well? No.
Unemployment Benefits
Who will be covered by the expanded program? Probably anyone who is unemployed, partly unemployed or cannot work because of coronavirus reasons.
How much will I receive? It depends on your state. Under the plan, eligible workers will get an extra $600 per week on top of their state benefit.

Are gig workers, freelancers and independent contractors covered? Yes, self-employed people are newly eligible for unemployment benefits.
What if I’m a part-time worker who lost my job because of a coronavirus reason, but my state doesn’t cover part-time workers? Am I still eligible? Yes, but the benefit amount and how long benefits will last depend on your state.
What if I have Covid-19 or need to care for a family member who has it? You are covered, but with certain requirements.
What if my child’s school or day care shut down? You are covered if you rely on facility to care for a child, elderly parent or another household member so that you can work — and that facility has been shut down because of coronavirus.
What if I’ve been advised by a health care provider to quarantine myself because of exposure to coronavirus? And what about broader orders to stay home? People who must self-quarantine are covered.
I was about to start a new job and now can’t get there because of an outbreak. You are covered.
I had to quit my job as a direct result of coronavirus. Would I be eligible to apply for benefits? It depends on the circumstances.
My employer shut down my workplace because of coronavirus. Am I eligible? Yes.

The breadwinner of my household has died as a result of coronavirus. I relied on that person for income, and I’m not working. Is that covered? Yes.
Whom does the bill leave out? Workers who can work from home, and have paid sick leave or paid family leave are not covered.
How long will the payments last? It depends on the state. The bill provides an additional 13 week on top of the time the state offers. The extra $600 payment will last for up to four months, covering weeks of unemployment ending July 31.
How long would the broader program last? Jan. 27, 2020, and through Dec. 31, 2020.
I’m already receiving unemployment benefits. Will I receive any help? Yes, your state-level benefits will still be extended by 13 weeks, plus you will also receive the extra $600 weekly from the federal government.
My unemployment recently ran out — could I sign up again? Yes, everyone gets at least another 13 weeks, along with the extra $600 payment.
Will this income disqualify me from any other programs? Perhaps.
How long will I need to wait for benefits? States were encouraged to waive the one-week waiting period, but right now are very short of staff.

Student Loans:
The federal government has already waived two months of payments and interest for many federal student loan borrowers. Is there a bigger break now with the new bill? Yes. Until Sept. 30, there will be automatic payment suspensions for any student loan held by the federal government. Check your account online.
How do I know if my loan is eligible? You are eligible if you have a federal loan in the past 10 years. According to the Institute for College Access & Success, 90 percent of loans (in dollar terms) will be eligible.
But, older loans and private loans are not eligible, but may offer their own assistance programs.

After August 1, watch for notices regarding federal loans and possible enrollment in an income-driven repayment plan.
Will my loan servicer charge me interest during the six-month period? The bill says that interest “shall not accrue” on the loan during the suspension period.  Once the suspension period is over check your loan – servicer errors are common.
Will the six-month suspension cost me money, since I’m trying to qualify for the public service loan forgiveness program by making 120 monthly payments? No. Your payment count will still go up by one payment each month during the six-month suspension, even though you are not making the payments. This is true for all forgiveness or loan-rehabilitation programs.
Is wage or tax refund garnishment that resulted from being behind on my loan payments suspended during this six-month period? Yes.

Are there changes to the rules if my employer repays some of my student loans? Yes, see the article for an expanded explanation.
Retirement Accounts
Which retirement account rules are suspended? For 2020, no one will have to take a required minimum distribution from any individual retirement accounts or workplace retirement savings plans, like a 401(k).
What if I have to take money out of my I.R.A. or workplace retirement plan early? You can withdraw up to $100,000 this year without the usual 10 percent penalty, as long as it’s because of the outbreak. See the article for more information.
Can I still borrow from my 401(k) or other workplace retirement plan? Yes, and you can take out twice the usual amount. For 180 days after the bill passes, with certification that you’ve been affected by the pandemic, you’ll be able to take out a loan of up to $100,000. Usually you can’t take out more than half your balance, but that rule is suspended.
Charitable Contributions
I want to help people who are suffering from the pandemic. Does the bill do anything about charitable donations? Yes, up to $300 in annual charitable contributions (if you don’t itemize deductions.
I am lucky to have substantial wealth, and I want to give more to charity than I usually do. Have the limits on charitable deductions changed? Yes, up to 100 percent against 2020 adjusted gross income.See article for more information (or your CPA).

Other Features of the Bill
How does the aid for small businesses and nonprofits work? You may be eligible for forgivable loans, read more in a separate article or a one-page summary.
See also: Practical and helpful guide for small business owners, prepared by the U.S. Senate Committee on Small Business and Entrepreneurship.  The Guide provides information about the new small business assistance programs in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
Will there be damage to my credit report if I take advantage of any virus-related payment relief, including the student loan suspension? No. Beginning on Jan. 31 to 120 days after the end of the national emergency declaration, lenders and others should mark your credit file as current, even if you take advantage of payment modifications.
Is there any relief for renters in the bill? Yes. The bill puts a temporary, nationwide eviction moratorium in place for any renters whose landlords have mortgages backed or owned by Fannie Mae, Freddie Mac and other federal entities. This will last for 120 days after the bill passes, and landlords also can’t charge any fees or penalties for nonpayment of rent.
Does this bill change any rules for health savings accounts and health care flexible spending accounts? Yes, menstrual products are now eligible for reimbursement.
Did the legislation make it illegal for any internet provider to cut off service to an individual or small business that can’t pay its bills? No.
Did the legislation make it illegal for utility providers to cut off service? No.

SURVIVING DEBT – From the National Consumer Law Center (excellent resource and free during the pandemic).

MUSINGS FROM DIANE:
I have to ask – how many of you believe the current president and congress are looking out for us?  The $2 TRILLION dollar stimulus will put $1,200 in each qualified adult’s pocket, plus some unemployment for a few.  The U.S. Census Bureau estimates there are 247,813,910 adults living in the US. The current population of the United States of America is 330,097,117 as of Sunday, January 12, 2020, based on Worldometer elaboration of the latest United Nations data. If we subtract the number of adults (247,813,910) that leaves 82,283,207 children.  If each adult receives $1,200 that equals $297,376,692,000.  If each child receives $500 that equals $41,141,603,500.  The total of adult and child payout is $338,518,295,500 (assuming every adult qualifies for the funds, which many will not because of certain restrictions).  2 trillion is $2,000,000,000,000.  That leaves $1,661,481,704,500, which goes where?  Of course, there is an unknown amount that will be paid for federal unemployment, family leave, sick leave, student loans (but is this really money or a credit?), but where is the rest going?

To say ‘$2 trillion’ does not shock us as much as seeing $2,000,000,000,000.00.  If they wrote out $2 trillion in their press releases this situation would have been brought to a crashing stop before it ever got started. It goes without saying that you and I cannot run our households or businesses this way.

So, what is their motivation?  That’s easy – the 2020 elections. This is really a way to buy votes.  The politicians can boast that they “put money in your pocket”.  In other words, they bought your vote for $1,200, plus a financial burden that will go for several decades.  How is this going to be covered?  TAXES!!!
Don’t get me wrong, there are many people that this short-term benefit will make the difference between eating or starving, having a place to live or being on the street. For those, we should help them with the basic life necessities.  My concern is that this was crammed through at a time when everyone is scared about COVID-19, which left us vulnerable.

The post Surviving the Pandemic – What is the Relief Plan? Will it Cost Us Our Financial Future? appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy & Foreclosure Attorney.

There are so few travelers left at Kennedy International Airport, one of the world’s busiest airfields, that taxis wait six hours or more for a single passenger.

Taxi companies can no longer find enough drivers for their fleets because there is so little business.

And some cabdrivers are so fearful of being exposed to the coronavirus they are staying home with no way to pay mounting bills.

All this at a time when many of New York City’s taxi owners are already in financial ruin after taking out reckless loans to buy medallions — city-issued permits required to own a yellow cab — at artificially inflated prices, with the reassurance of the city’s taxi commission of their high value.

Their industry has increasingly lost riders to the boom in Uber, Lyft and ride-app services, and been shaken by a spate of suicides by desperate taxi owners and for-hire drivers.

Now taxi owners and drivers who were barely holding on said their livelihood had evaporated as the city all but shut down to try to slow the spread of the coronavirus.

“When you have to wait six or seven hours to get one passenger, it’s really bad,” said Mario Darius, 66, a taxi owner who was camped out at Kennedy Airport after picking up just three fares in three days.

Though citywide taxi ridership numbers for March are not yet available, some taxi companies, cab owners and drivers said their rides had plunged by two-thirds or more.

The city’s largest taxi group, the Metropolitan Taxicab Board of Trade, which represents the owners of 5,500 yellow cabs, said rides had dropped nearly 91 percent to a total of 20,596 trips over this past Friday, Saturday and Sunday. That is compared with 217,540 total trips for the same three days three weeks ago.

I’m required to give you three legal disclosures Now that most consultations are by phone and zoom, I’m posting these on my webpage.  The first disclosure This first disclosure tell you that you have four choices under the bankruptcy law. Chapter 12 is only for farmers, and fisherman. I’ve never done a farmer Chapter 11 […]
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