The COVID-19 pandemic affected every part of our lives. The sudden shutdown of normal life brought the U.S. economy to a near standstill. Many of us in Santa Rosa who could not work from home lost our jobs or got very sick and could not work. A lot of people are still looking for new work or had to take a lower-paying job.
Congress passed the CARES Act and the Payment Protection Program (PPP) in part to help Americans struggling due to the pandemic. The CARES Act included a moratorium on foreclosures, relieving a huge source of financial stress for homeowners struggling with debt. And the PPP provided money to employers to help them make payroll even though their ability to do business was virtually or totally stopped. Having paychecks continue to come in helped millions of households stay above water.
These and other measures taken by the federal government, as well as states like California, helped cause the personal bankruptcy rate to crater in 2020. But two years later, many observers expect Chapter 7 and Chapter 13 filings to go up a lot very soon.
End of foreclosure protection for homeowners
For one thing, the extension to the CARES Act, which continued the federal pause on foreclosures, ended in March. As 2022 draws to a close, it is unfortunately likely more and more homeowners behind on their mortgage payments will face foreclosure this year or in 2023.
If you are worried about being in this situation soon, you should know your options ahead of time. The more you can plan ahead of a possible financial crisis, the easier it will be to get through it. Even if you are not sure bankruptcy is necessary, a conversation with a bankruptcy attorney can help you understand what you can do to possibly keep your house and get out of overwhelming debt.