5 On Your Side

Communicate now, talk to an attorney before considering bankruptcy

If situations don't improve many could be headed for bankruptcy, and those people should strategize now.

Posted Updated

By
Monica Laliberte
, WRAL executive producer/5 on Your Side reporter
RALEIGH, N.C. — So many families are struggling financially right now. Special programs help, but at some point they may not be enough.

If situations don’t improve many could be headed for bankruptcy, and those people should strategize now.

"It is a good time for people to get in and start thinking about 'If it doesn’t come back to the normal life that we knew before the pandemic hit, what are our options? What can we do? How can we talk to our lenders and our landlords,'" says bankruptcy attorney Rebecca Redwine.

She told 5 On Your Side she’s getting many calls now from people who aren’t sure what the future holds and are unsure what’s going to happen.

For those facing financial strain, Redwine says the first step is to communicate.

"Keeping your lender informed, keeping your landlord informed can be helpful," said Redwine.

Assess what you owe: Are you late on bills, and if so how many payments have you missed?

She says to try to work with lenders or your landlord.

"Taking a hard look at your numbers, being realistic about where you are with your income and your expenses, and being realistic about when that is going to change, if it’s going to change," says Redwine.

She says some face double trouble.

"Many small businesses, their owners have signed personal guarantees, which is a fancy way of saying that the individual business owner is personally responsible for the debt that the business owes," she said.

Meaning a small business owner could face a personal and business bankruptcy filing.

She says to reach out to an attorney if you have questions, because bankruptcy might be the best option."It can be just a pretty strategic tool in the toolbox to use to get you out of a situation that you didn’t create," said Redwine.

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