Undoubtedly, this is a challenging time. Not only are you worried about your family’s health, but the impact of COVID-19 has also likely left you concerned about your financial situation. The closure of all restaurants and bars has created significant job and income losses for employees. Employers are likewise hurting, as the CDC and Governor’s recommendation on social distancing has prevented many businesses from continuing their normal operations. Adding to the stress, schools are closed, forcing many parents to stay home to care for their children and homeschool them. Trying to work remotely from home while at the same time caring for and trying to teach your children is extremely difficult for even the best multitaskers.
I know the first reaction for many people in this unprecedented situation is to panic. I’m no different. When my kids’ school closed, I too felt some panic. How would I possibly continue working and care for/teach my children at the same time? In addition, a large part of my job as an attorney involves in-person communication – with my partners, my clients, fellow attorneys, and judges. But now, most courts are closed to the public, trials and hearings are adjourned or are only being held telephonically, and in-person meetings with my clients and partners are non-existent.
Financial hardships are inevitable in times like these, but how we handle them can make a big difference in the future. As a bankruptcy practitioner I have seen firsthand how the fear of not being able to make ends meet can lead people to make rash, and oftentimes, bad decisions. People drain their retirement accounts, mortgage their homes to pay off debts and wait until the last minute to seek help from a professional – actions that can seriously limit my ability to assist them. My advice during this time is to try to stay calm, and understand that there are options for you, both individually and for your business, if you do find yourself in a tough spot.
Bankruptcy might be one of those options. While I realize many people perceive bankruptcy in a negative light, bankruptcy is sometimes the only way to navigate through a difficult time and get an individual or business back on their feet. For individuals, a bankruptcy can prevent a home foreclosure while allowing you to catch up on arrears. It can stop garnishments. Retirement accounts can be protected, as can many of your assets. The list of real and substantial benefits from a bankruptcy goes on. For small businesses, The Small Business Reorganization Act of 2019 (SBRA) was signed into law last year. This Act provides small businesses the same opportunity to restructure as large businesses can in a Chapter 11, but in a much quicker and less expensive way. My point is, before taking any drastic action, reach out to a professional to discuss what options you may have. I offer free consultations, as do most other attorneys.
In addition, I want to share some of the below information/resources that may be helpful for small businesses and individuals:
- The Small Business Association of Michigan (SBAM) is a great resource for small businesses. There is a small yearly membership fee, but they offer a lot of great benefits. Right now they are holding daily video briefings for small business owners to keep them updated on the current COVID-19 situation and any new relief that may be available. This is on their Facebook page, which is available for anyone to view.
- Step Forward Michigan is a program that provides financial assistance to individuals who are struggling with their mortgage, condo association fees, and/or property taxes for their primary residence. This program has paid off up to $30,000.00 in mortgage arrears for some of my clients and has also made mortgage payments for up to one year due to a hardship.
- Michigan Unemployment Insurance Agency. Governor Whitmer recently signed an order that will allow employees to obtain benefits if they need to care for a family member or are not allowed to work due to COVID-19.
- Governor Whitmer also signed an executive order that will extend the property tax foreclosure deadline from March 21, 2020 to May 29, 2020 to give families more time to pay their back property taxes.
- The Emergency Family and Medical Leave Act (HR 6201) has passed. This bill provides employees of employers with less than 500 employees the right to take up to 12 weeks of job-protected leave under FMLA. This Act also includes some provisions for paid leave for employees and tax credits for employers.
- Utility shutoffs are suspended. The City of Grand Rapids suspended water service shutoffs through April 30th and accounts in shutoff status will be restored. Consumers Energy and DTE suspended shutoffs for senior citizens and low-income eligibility households until April 5th.
The current events concerning COVID-19 present health, familial, professional, and financial difficulties for many, if not all, individuals. There are, however, precautionary measures that can be taken to protect you and/or your small business’s future.
Don’t wait until it’s too late—consider consulting with an experienced attorney regarding the potential options that may make all the difference. If you or someone you know is experiencing financial difficulties, call our office at 616.608.3061 or contact us through our websites contact page for a free consultation.