Blog Bankruptcy Considerations During the Pandemic

June 22, 2020

By Clyde Cash

The economic downturn caused by COVID-19 will unfortunately be with us for the foreseeable future. There has never been a better time to try to make the best financial decisions possible. 

I have been working in the Bankruptcy Law area for over 20 years along with my paralegal, Vicki Craver. We have seen decisions made by folks, sometimes out of panic or frustration, that have led to regrettable outcomes. I can share some of those decisions with you.

Although it is sometimes difficult to know what to do in any given situation, I can point out traps to avoid regardless of the situation.  First, normally a debt relief company is not a good idea. I have seen hard working people pay large amounts of money to these organizations only to find themselves in several collection lawsuits. This is sometimes caused by someone having, for instance, 7 credit cards or other debt problems. The debt relief outfit says:  Great news! We have worked out deals with 4 of your accounts. Well, guess what happens to the other 3! Also, if you are not able to make the payments to the debt relief organization (and, of course, they keep part of your money), the other 4 that were “handled” come after you in court as well. 

Creditors are also quick to tell you not to file bankruptcy. That is a self-serving statement for them because they know that a bankruptcy filing protects you from creditors (them) and they are no longer in the driver’s seat. 

Another ‘trap’ is raiding your retirement accounts. Normally, retirement accounts are protected in bankruptcy and, therefore, safe. However, folks tend to see the 401k as a way keep their accounts current. Tragically, they deplete the retirement account and have only bought themselves a short amount of time only to be back where they started. 

When a financial crisis hits, another common trap is to use available credit card limits to keep your life together. Once again, that only results in creating an even more difficult situation down the road. To be sure, credit card companies are not concerned about you putting food on the table for your family. All they want to know is when are you going to send them more money. 

I would be happy to meet with you at no charge for the initial consultation to assess your situation and possibly help you avoid having to file bankruptcy. Please do not hesitate to contact me. It may be one of the best financial decisions you make.   

You can reach me by email at, by phone at 336-714-2561 or contact my paralegal, Vicki Craver, by email at or by phone at 336-714-2568.