If you’ve lost your job or struggle to pay your debt, you may need to file for bankruptcy. If that’s the case, you should ignore some common financial advice and start thinking defensively.

If there’s even a chance of bankruptcy in your future, here’s what you should do now

  Published: May 13, 2020 at 5:01 a.m. ET        By          

Liz Weston

  Don’t touch your retirement money, and don’t let cash pile up

                                      

              
         

With millions out of work, it’s likely that unprecedented numbers of people and businesses will head to bankruptcy court.

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This article is reprinted by permission from NerdWallet.

      

If you’ve lost your job or struggle to pay your debt, you may need to file for bankruptcy. If that’s the case, you should ignore some common financial advice and start thinking defensively.

      

The coronavirus pandemic that upended the economy is also expected to send unprecedented numbers of people and businesses to bankruptcy court. Millions are out of work, and economic disruptions could continue until a vaccine is widely available, something that may be more than a year away.

      

“I am gearing up for having a tsunami of new cases,” says Jenny Doling, a bankruptcy attorney in Palm Desert, California, who serves on the American Bankruptcy Institute’s Chapter 13 Advisory Committee. “I think there will be a whole lot more people filing than what anyone’s ever seen before.”

            

If bankruptcy may be in your future, here’s what you need to know now.

      
Don’t wait to talk to a bankruptcy attorney
 

People are usually advised to solve their debt problems on their own, if they can, or to consult a credit counselor, with bankruptcy as a last resort. But the people who come out of bankruptcy in the best shape tend to be the ones who got expert advice early, Doling says. You can get referrals from the National Association of Consumer Bankruptcy Attorneys, and the first meeting is typically free.