People often wonder what happens when a store files bankruptcy and shuts down its retail outlets. Store closings and corporate bankruptcy filings affect many kinds of people in the local community: employees and customers and landlords.

Stein Mart started by laying off 100s of employees in its corporate headquarters on the Southbank of the St. Johns River in Jacksonville.  It also furloughed over 8,00 employees in its retail stores and in its supply chain. These former employees can file for unemployment benefits as soon as they are laid off.

Americans who have become used to using credit cards as a stop-gap measure to survive pay-cuts might not be able to rely  on this method since nearly 50 million Americans just had their credit card limits cut.

For centuries, companies have used bankruptcy as a tool to survive, reorganize or to shut-down. Several airlines have filed bankruptcy over the past three decades, primarily to break contracts and modify pensions.

Many Floridians are worried about how they will pay for necessities like housing, food and transportation. By now, most Americans who are eligible to receive the Coronavirus Aid, Relief, and Economic Security (CARES) Act Stimulus payments have received their money. In Jacksonville, there will soon be an additional $1,000 available to each Jacksonville household that earns under $75,000 and can show they’ve taken a 25% income loss due to coronavirus.   This program will be run by the city of Jacksonville, but funded by the Federal Government. The city will be issuing payments cards to 40,000 households. One household member must apply for the assistance online or by phone and then go downtown in person (the Main Library on N. Laura Street or the Ed Ball Building on N. Hogan Street) to an appointment to receive the payment. You will go to an auditorium, while practicing social distancing.

In order to get an appointment, residents must show that they had employment as of February 29, and that the Coronavirus epidemic caused them to lose at least 25% of their income. This test should be easy to meet for “non-essential” workers, who lost jobs or income because of the governor’s or mayor’s mandated shutdown.  City Council President Scott Wilson  said he expects the website to be up and running soon, and that “the goal is to start cutting checks — and what we’re going to do is give debit cards or credit cards, gift card type things — within the next seven days.”

The reason for these payments is that the federal government wants to try to “stimulate” the economy, which COVID-1, or the coronavirus, has wrecked.  Millions of Americans have lost their jobs or seen their pay reduced since March. It has been estimated that nearly 1 out of 5 Americans has lost a job or wages because of the virus.  When consumers don’t have money to spend, the ripple effect causes most businesses to struggle. People are not buying goods and services from brick and mortar businesses, which in turn have to lay off employees who can no longer buy goods and services from other merchants. Goldman analysts see the U.S. economy contracting 24% in second quarter, a rate nearly five times as large as bank’s previous forecast

While the government wants us to spend this money to keep the wheels of commerce rolling, some banks want to seize this money to recover money owed to them by their customers. When Congress passed the CARES Act authorizing these payments, it did not characterize the funds as federal benefits, but as tax credits. This means that private debt collectors may take the money once they are in a bank account.

Our lives have changed in a flash.  The Associated Press warns that Americans must brace for new life of no school and growing dread.  We now spend more time in line at Walmart buying toilet paper than we do lining up for Black Friday sales. Parents worry about their jobs while they wonder who’ll watch their children while they are at work since schools have extended spring break or shut down for weeks.

The world has changed.  We are told to practice “social distancing” and not come within so many feet of our fellow human beings. People are wearing medical masks and gloves when they go out. Some people walk around with Lysol bottles.

First, you will be very surprised to learn that bankruptcy most likely will not have the devastating impact on your ability to be a renter as you might expect. Of course, everyone’s specific situation is going to differ. But as long as you had a good rental history prior to filing bankruptcy, have a steady job, and make sure you do not make the same mistakes that led you into bankruptcy, you should be perfectly fine. Albeit, you might be required to make a larger security deposit or jump through a few more hoops. And the longer it has been between the time you filed bankruptcy and when you apply for a new rental agreement, the less of an affect filing bankruptcy will have on being a renter. Below are several factors potential landlords might take into account:

1. Rental history: As already mentioned, your rental history prior to filing bankruptcy is a huge consideration as well as your rental history after bankruptcy.
2. When you filed bankruptcy and your credit history since. Just like in every other aspect of life, everyone makes mistakes. The important thing is that you learn from those mistakes and do not repeat them. That is why having a good credit history after bankruptcy is so important. It will show a potential landlord that although you filed bankruptcy at some point in your life, you took steps to ensure that would not happen again and can manage your finances perfectly fine.
3. Income. Your income is another important aspect that a potential landlord will take into account. Having a large income is not nearly as important as having a history of a steady income as well as a history of paying your bills on time.
4. Disposable Income: Your disposable income, the income you have left over after you pay all your monthly bills (including all minimum debt payments), is also significant.
5. Why you filed Bankruptcy. If it has not been long since you filed bankruptcy, a potential landlord might even take into account why you filed bankruptcy. As already stated, everyone makes mistakes. What you do with those mistakes is what is important. Also, many people fall into bankruptcy out of no mistake of their own. Many of my clients were forced into bankruptcy when the market crashed and many long-time jobs were lost.

Just like how filing Bankruptcy will affect being a renter in Jacksonville, Florida in a much less devastating way than expected, bankruptcy will most likely not have an overwhelming devastating impact on many other aspects of your life as well. Of course, filing bankruptcy will touch just about every aspect of your life in some way, but it will hopefully be in a way that gives you a fresh start towards a much brighter future. Contact the Law Office of David M. Goldman, PLLC to discuss whether filing bankruptcy is your best option.

1. Are you only able to make your minimum credit card payments or no payments at all?
2. Are your wages being garnished by a Wage Garnishment Order?

 The Fair Credit Reporting Act.

The Fair Credit Reporting Act, or FCRA, is the act that controls how creditors, buyers of credit, and credit reporting agencies may report debt. This act was enacted to ensure creditors and the like maintain accurate information regarding a person’s credit information. Creditors are required to truthfully and accurately report information to consumer reporting agencies.

What type of bankruptcy should I file?

When a person decides to file for bankruptcy, he or she may be able to file two different types of bankruptcy: Chapter 7 or Chapter 13.

Filing a joint bankruptcy is normally a more convenient process as it allows a couple to wipe out their debts together in a single bankruptcy. This means the couple will not have to attend separate hearings. A joint filing will save the couple money on court costs, as the filing fees are the same for an individual or joint bankruptcy. And attorneys will also charge less for a joint bankruptcy filing than if the attorney was filing two separate bankruptcy petitions.

However, filing a joint bankruptcy may not always be in the best interests of the couple depending on the couple’s income, assets, and debts. Once a couple gets married, they may have a more difficult time qualifying for a Chapter 7 Bankruptcy.