COVID-19 Pandemic and NJ Bankruptcy

Coronavirus & New Jersey Bankruptcy

The Coronavirus spread pandemic is wreaking havoc on our economy, our nerves and changing our way of life as we know it, right before our eyes.

The financial disaster that many of us now must face is very similar to the problems I have helped people overcome for nearly two decades.

Serious medical and health issues, loss of paycheck, loss of employment, financial upheaval are all too familiar problems to me. I’ve had all of them myself and many at the same time.

However, the situation we now face as our new reality is very much different because of the sheer magnitude of the situation.

The increasing number of new coronavirus cases reported every day is astronomical.

The list of businesses that are closing, either because the government is forcing them to close, like bars, restaurants, hair salons, etc, or because the lack of customers being warned to shelter in place or at a minimum avoid groups at all costs.

People are scared to venture out of their homes, and some are even on mandatory lockdown. This makes it impossible for many businesses to keep the doors open even if they want to.

Covid-19 and Personal Bankruptcy

We have never in our lifetimes faced such a national emergency like the one we face today.  But, do you know what?  We are a strong nation and we will survive.

And the filing consumer bankruptcy will be major a part of the recovery effort.  Most of us live, if not paycheck to paycheck, without enough savings to last more than just a few months.

Many of us will need to borrow funds, rely on credit cards and personal loans and any other means available to make it through this trying time

After borrowing those funds, the banks will expect to be paid back and unfortunately, when you are unable to pay, you will be threatened by creditor actions, lawsuits, garnishments, repossession and bank account levies.  You will be forced to fight.

Fight for the protection from the loss of your property and income.

How do you fight? It’s called the bankruptcy system.

Bankruptcy Courts and COVID – 19

The United States Bankruptcy Courts for the District of New Jersey are open, although they are not holding “in-person” hearings, they are open and cases continue to be processed.

Pikunis Law is still open. We are still “seeing clients’ by phone, facetime, and Zoom  video conference.

We can process your entire case, from our initial telephone/video consultation though the case preparation, signing and filing, and the “currently” telephonic trustee meeting. You can actually have your entire case processed without leaving the safety and comfort of your own home.

Many of our trustees are conducting our mandatory 341 trustee meetings by telephone and videoconference platforms.

National Emergency Bailout – Stimulus from Government

The government is going to provide some sort of stimulus package and help everyone as much as a government can. Ultimately, WE are responsible for taking care of ourselves and our families. The government checks will ease the immediate burden somewhat but surely will not go far enough.

Some are predicting massive bankruptcy filings once the virus comes under control, whenever that may be.

However, bankruptcies are already on the rise in New Jersey and New York.  According to one study done by the New York Post, one in four Americans do not have enough money saved to cover more than two months of expenses and one out of every four people doesn’t have any savings. Moreover, a poll conducted on behalf of Chase Bank showed that 40% of adults wouldn’t be able to cover unexpected expenses of more than $400.

Some financial experts are recommending that people should conserve their cash, focus on family first, prepare for tough times and do what they have to do to survive.

In other words, it might be a good idea NOT to pay ordinary credit card debt, medical bills or other unsecured debts until we have a better idea what the future brings.

Debts will not be forgiven voluntarily due to Covid-19

Debts will not be forgiven as part of the Federal Stimulus. Filing of bankruptcy will be necessary to deal with the new debt as it will not be forgiven as part of a governmental subsidy or bailout.

The loss of income due to lack of work, massive layoffs and illness will be more than most can handle on their own.  Even if the coronavirus does not impact your health, it may stop you from going to work or force your employer to shut down or bankrupt your place of business.

Moreover, many medical experts believe that if infected with the virus, it may take as long as three full weeks to recover. What will happen to the people who will have to miss three weeks of work? For many, household expenses, mortgage payments, credit card payments and student loan payments will be missed. Many individuals get their insurances covered through their employment.  However, if they are not employed, they may end up with large medical bills.

Personal Bankruptcy and Coronavirus

Personal bankruptcy will become the “next phase” of our journey through this pandemic.

The good news is that we will recover. Bankruptcy will allow us to keep our property, wipe out debt too big for us to handle and we can rebuild our credit in less time than most people think.

In order to file Bankruptcy in New Jersey, there are certain steps that you can take to better prepare to ensure your bankruptcy runs smoothly. Bankruptcy laws are very complex and hard to understand. Furthermore, there are many things that people should not do before filing bankruptcy. Below, is a list of some of the things which you should not do before filing bankruptcy:

      • Do not transfer property out of your name.
      • Do not give away any property to friends or relatives.
      • Do not take out new loans or charge excessive debt on your credit cards.
      • Do not cash out your retirement accounts.
      • Do not transfer title to your property or car.
      • Do not take your name off a deed.
      • Do not give your friends or relatives gifts.
      • Do not pay back any friends or relatives for money they have loaned you.
      • Do not take all of the assets out of your business and sell them.

Remember that many lawyers give free consultations that you should take advantage of. The only thing it will cost you is your time.  Pikunis Law is available for consultations.  Please call (856) 282-5505 or email: or contact through our website at

Thank you and good luck to you all.  Relief is available. We’ll get through this together.

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