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COVIDS Effect on Evictions and Foreclosures

The year 2020 has been and continues to be a very trying year. The beginning of the year brought on a pandemic caused by the coronavirus. With the pandemic came along an ongoing quarantine sentence with no end in sight. Many attempts to stall the increase in covid-19 cases have failed and there are currently predictions of a second wave.  The first wave of the pandemic brought record breaking numbers of unemployment and bankruptcies. This caused a drastic decline in the economy leaving people with little hope for recovery.  The need for an eviction attorney (commonly referred to as a landlord-tenant attorney) is expected to rise in the upcoming months.

After seeing the aftermath of the state of emergency brought on by the coronavirus, the government has tried to help in various ways, including the implementation of am eviction moratorium. To help individuals and businesses offset financial hardships, they introduced and passed the Coronavirus Aid Relief and Economic Security act. This covid-19 relief bill gave eligible citizens $1200 minimum and loaned businesses money to prevent bankruptcies. Though  helpful, the relief bill only went so far in helping citizens and many are right back where they started. With individuals unable to pay bills, many are in danger of losing their homes and need an eviction attorney.

Bankruptcy can provide some relief to homeowners facing evictions and foreclosures; however, the petitioner must meet certain qualifications to ensure the home is not taken by the bankruptcy trustee.  Recently, Governor Gavin Newsome has signed into law assembly bill 1885 which helps homeowners keep their homes when filing for bankruptcy.  A bankruptcy attorney can provide more information on this.

The state of the economy prior to the coronavirus pandemic

Prior to the pandemic, the rate of unemployment had been going down but that changed overnight. In just April at the beginning of the pandemic and quarantine, the unemployment rate rose to 14.7%. This rise can be attributed to businesses shutting down and laying off numerous employees as a result. Job offers were rescinded as well further leading to the increase and forcing people to file for unemployment. This mass unemployment coupled with other factors contributed to the economic decline. For the housing sector, housing rates decreased.  Unfortunately, the decrease in housing rates renders loans harder to obtain.  As a result, those looking to purchase homes encounter struggles in getting the necessary loans to finance their homes. In addition, housing rates have seen little to no change, making it difficult for new renters to find homes.

The increase in unemployment has made it harder for a lot of people to make their housing payments. Given the circumstances, individuals are falling into more debt with little recourse. In addition, the current state of emergency is ongoing, resulting in fewer option for people to utilize.

The resulting housing crisis following the pandemic increases the need for an eviction attorney

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Currently, there are restrictions in place preventing landlords from evicting tenants for the duration of the pandemic. The order also prevents the utilities from being shut off while lockdown is ongoing. Although there are certain requirements to qualify, this order has helped prevent an increase in homelessness. This order however only lasts till the end of the year and as such is not a permanent solution. When this order expires, landlords are going to expect payments as will utility companies putting those individuals in a predicament.

As the year is coming to an end, it is best for affected individuals to start searching for solutions. In the meantime however, some landlords will try to go around the law and demand rent payment. In the event that this happens, make sure you talk to an eviction attorney as they will help you. Though there is an order preventing restrictions, some landlords will continue to pursue eviction efforts. It is always best to prepare for such events by having an eviction attorney (landlord-tenant attorney) in case it happens to you.

The eviction moratorium, current government assistance programs and relief orders

At the beginning of the pandemic, governors nationwide were swift to enact an eviction moratorium to prevent homelessness on a mass scale.  In California, this moratorium on evictions helped prevent evictions for an estimated 5.4 renters.  Many experts view the eviction moratorium as a temporary band-aid; after all, landlords will eventually be legally entitled to all unpaid rent.  The need for a landlord-eviction attorney will swell once landlords begin demanding back rent.

The CARES Act

As mentioned earlier, at the start of the pandemic, the government passed the Coronavirus Aid Relief and Economic security act.  This act also known as the CARES act was an economic stimulus bill that provided relief to different areas.  The bill included cash payments to qualifying American citizens in the sum of $1200 and increased unemployment.  Unemployed residents received an additional sum of $600 per week in unemployment, which expired in July.  After this, individuals received another bonus payment of $300 per week for a total of 6 weeks.

The CARES act also provided financial relief to businesses and organizations in need in the form of loans. However businesses needed to meet certain requirements such as a revenue minimum to qualify for the loan offered. In addition, the government created a loan program for small businesses called the paycheck protection program (otherwise known as “PPP”).  All these programs enabled some businesses to remain operational while stopping foreclosures and evictions from increasing.  These programs disqualified businesses owned by or connected to political figures.

The federal government executed the CARES act and the assistance programs under it. This means that qualifying residents in all states received the additional benefits provided.

Additional relief efforts

The state of California however recently signed into effect another bill to help residents. The recent bill AB1885 increased the homestead exemption so bankruptcy filers can keep their homes when they file. This increase was much needed as the previous homestead exemption ranging from $75000 – $175000 was not sufficient.

Recently, there have been many attempts to pass another stimulus bill to further support residents. However, these attempts have failed as the ongoing debate and election for a new president continues. Experts can only speculate that a new bill will be passed following the 2020 election. What is known however is that the first stimulus bill though helpful only did so much to help citizens. A new stimulus bill is needed to assist both individuals and families alike overcome the pandemic’s long lasting effects.

San Diego attorney Tristan Brown says, “we witnessed how the economic recession displaced so many people 12 years ago. Foreclosures and evictions were rampant. If the government doesn’t act, we may see something far worse in upcoming years.” So, while the government has helped in some ways, more is needed for further assistance.

 

Eviction attorney (landlord-eviction attorney) and additional resources

As mentioned, the country is still in a state of emergency, there are orders in place to stop evictions and foreclosures.   Governor Newsome’s statewide eviction moratorium helps a lot of individuals and families unable to afford payments keep their homes during this time. However, some landlords may try to find some loopholes so they can evict tenants. In addition, since these orders vary by state, creditors will try to find loopholes so they can still pursue foreclosure.  Be mindful of the various options at your disposal.

The first thing to do when this happens is to seek an attorney from either of the following categories. The attorney you choose will depend on the situation you find yourself in and the one best suited for it. You may choose a landlord tenant attorney or a bankruptcy attorney . These lawyers provide relief to individuals struggling with losing their homes.

A landlord-tenant attorney (also known as an eviction attorney)

A landlord-tenant attorney (or eviction attorney) is a lawyer who specializes in the law specifically relating to landlords and tenants. A tenant or a landlord would consult such an attorney for issues related to the landlord-tenant relationship. This includes, a landlord not fulfilling his or her duties by maintaining the property.  Additionally, landlord-tenant attorney represents landlords or tenants with respect to evictions.  Since there are currently eviction moratoriums stopping evictions, the need for eviction attorneys will increase in due time.

You usually consult a landlord-tenant attorney when your landlord has already sent you an eviction notice or claims to send one. An eviction attorney will help you fight an impending eviction especially when it is unlawful.  If a landlord fails to follow the proper steps of an eviction then your eviction attorney will inform and assist you. Additionally, an eviction attorney will help you prevent losing your security deposit and other additional fees that a landlord requests.

It is important to remember that landlord-tenant laws vary by location so consult and hire one in your area.

Bankruptcy Attorney

A bankruptcy attorney specializes in helping clients reduce debt with or without going through the bankruptcy process. Filing for bankruptcy can help you keep your home, so consulting with a bankruptcy attorney is helpful. Some may fear the long lasting effects of a bankruptcy claim, so speaking with a bankruptcy lawyer is helpful. A bankruptcy lawyer knows additional financial resources that will enable you to keep your home without bankruptcy. So pending on your situation, one of the three attorneys will be helpful in helping you keep your home.

Bankruptcy as a solution to keeping your home

Bankruptcy as a solution to keeping your home

Bankruptcy is a viable option for homeowners with financial troubles and seeking solutions. The number of bankruptcy claims has increased since the beginning of the pandemic and not just individual claims. Businesses have also filed bankruptcy due to lack of revenue in an attempt to start over. Filing a bankruptcy claim is a good option because it will relieve some financial stress.

There are 6 different bankruptcy chapters available to file for but they all serve different purposes and populations. Some bankruptcy chapters apply to businesses, while others apply to individuals. There are two chapters for individuals to file for which are chapters 7 and 13.  Chapter 7 bankruptcy discharges unsecured debts allowing you to keep your home. Now under assembly bill 1885, individuals with higher home equity values can also file and still keep their home.

Chapter 13 bankruptcy is the chapter that reorganizes your debt giving you a timeframe to pay it off. While this chapter of bankruptcy does not erase all debt, it is still helpful in alleviating financial stress. To successfully file for both chapters of bankruptcy, there are certain requirements that need to be met. A bankruptcy lawyer will let you know whether you meet these requirements at your consultation. Bankruptcy comes with a lot of stigma but it is a practical financial option when you weigh the pros and cons.

For those in need of extra encouragement and insight into bankruptcy, San Diego bankruptcy attorney Tristan Brown has some words. “In hopes of stalling their evictions, some people file bankruptcy with no intention of following through with their case. This is not advisable. In fact, these types of filings can be considered fraudulent. However, a bankruptcy done properly can help you stay in your home and get back on track.” Trust that your bankruptcy lawyer has your best interests and will do their best to secure you your financial freedom.

Conclusions

The coronavirus pandemic and the state of emergency that followed it has taken a toll on everyone. For those who have been affected, it is okay to seek help whether financial or otherwise. Take it easy on yourself and understand these are circumstances outside your control. The pandemic and quarantine caught many off guard since a sizeable portion of the population failed to properly prepare.  This ill-preparation caused the implementation of a variety of relief efforts.

The stimulus package and all other laws/bills that have ensured since then are all meant to help. So if you need the help, be sure to take it and alleviate some of that financial pressure.  Keep these resources in mind for when the relief efforts begin to dwindle. Remain prepared for any looming difficulties in 2021.

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