The Coronavirus brought a wave of panic, a tsunami of illness and death, and a flood of financial ruin in its wake. While federal, state and local governments are working quickly to provide financial relief for affected businesses and persons, there are no free remedies. Low interest SBA loans will require increased monthly payments, tax credits will reduce government funded social programs and increase the deficit, and rent abatements will result in future increased monthly rent obligations. Income lost is never recaptured. The ripple effect of this financial catastrophe will be felt for years to come.
A non essential business enterprise or laid off employee will need to maximize profits or savings to pay essential operating and living expenses. Paying that line of credit or credit card balance will no longer be as necessary as meeting payroll or paying the power bill. Just as important as social distancing is a making financial plan.
Bankruptcy can either wipe out unnecessary monthly expenses or manage the repayment of existing debt through a court supervised repayment plan. In 2010 at the height of the real estate financial crisis business and non business bankruptcy filings totaled 1,593,081, then steadily declined to 772,646 in 2019 (https://www.uscourts.gov/ news/2019/04/22/bankruptcy-filings). These filings helped our economy get back on track. Reducing and restructuring debt converts stagnant unemployment and tepid consumer purchasing into a raging economy.
Many make the mistake of trying to ride it out, hoping things will get better. Optimism is admirable, but why deplete valuable resources, liquidating retirement and savings accounts, to make payments that could either be discharged or restructured over a more manageable reduced payment at no interest, penalties or late fees?
We encourage you to contact our office discuss a proactive financial plan to protect your assets from the storms to come. Our team at Goldsmith & Guymon, P.C. has provided the greater Las Vegas community with legal services through the economic swells over last 24 years and has the experience and reputation necessary to assist in the coming storm.