Currently, we are faced with a global pandemic. With COVID-19, more commonly referred to as Coronavirus, we are being forced to take precautions and stay in our homes in order to prevent the spread of this infectious respiratory disease. Schools have transitioned into online lectures, while much of the workforce is now working from home. Although some have the opportunity to do so, certain careers do not have the luxury to do so. For those in the transport or service sector, for example, jobs are either being halted, or workers are being forced to continue working and coming into contact with others. Some are even faced with unemployment as companies are being forced to make changes to prevent bankruptcy or in the process of shutting down. With more lockdowns continuing to be placed and companies halting production, more layoffs can be expected contributed to the rising unemployment rate.
Large industries are experiencing the effects of the virus as well. One of the biggest hits has been to the transportation industry. For example, the airline industry is experiencing its lowest amount of bookings since 9/11. With travelers canceling existing flights due to travel restrictions, the demand for flights is at a low, forcing airlines to cut routes and eliminate the need for certain workers. Current guidelines require those returning from a trip to self-quarantine or 2 weeks in order to prevent the possible spread of the virus. Normally, this season is a successful time for airline companies due to spring break and upcoming summer plans. However, with the current, unknown state of the Coronavirus, airlines can expect an even greater decline, ultimately surpassing the last great decline, which resulted from 9/11. During this time, it took nearly 2 years for airlines to recover and reach the rates they were at before. Another way airlines attempted to recover was to merge together with existing companies to prevent either from going out of business entirely. With the current situation, changes will have to be made if bookings do not improve over the next 3 months. It is possible that routes will be cut, some companies may be forced to merge with others, or ultimately go out of business if necessary.
Another industry facing the impact of the virus are cruise companies. After two of their ships were quarantined due to 21 passengers and crew members testing positive for Coronavirus, Carnival’s Princess Cruises has suspended all 18 of its ships until at least May 11. While the company is giving customers refunds and vouchers, shares have already fallen more than 20%. Viking Cruises has also suspended operations, prohibiting 79 ships across the world from running until at least May 1. In fact, it has been reported that the cruise industry is likely to have the worst economic impact than any other industry.
Retailers are also experiencing a great shock with the spread of the virus. While many retailers have already began struggling due to a rise in online shopping, like Amazon, in-person retailers are inching closer to filing for bankruptcy. The outbreak caused many to stock up on supplies and buy essentials in bulk, leaving aisles in stores like Costco or Target empty. Stock shipments are delayed, making it more difficult for stores to restock their shelves as quickly as they normally would be able to. Services, such as restaurants, movie theaters, and hotels, that rely on having as many customers as possible are seeing a dramatic decrease in sales, making it difficult to afford keeping on as many employees as they do.
The effects of the Coronavirus on the economy are continuing to worsen day-by-day. While the U.S. is currently inching towards a recession, there is the possibility of a depression in the future. The current economic state is being compared to the Great Depression. Unemployment is expected to reach 30% and GDP is expected to drop 50%. With an increase in unemployment, there will be a decrease in spending as many will no longer receive the income they were before.
KNOW YOUR OPTIONS
During this time of uncertainty, it is important to know that if you are suffering from financial hardships, you have options. For example, if you are a landlord and tenants are not making payments on time, tenants are given 180 days from the initial filing date and a 90-day extension to decide whether or not to continue their lease, if a Chapter 11 case is filed. If a Chapter 7 case is filed, tenants have 60 days to make a decision. However, the Court will still order the tenant to make rent payments. If he/she fails to do so, the landlord is able to take the property back. As a landlord, it may be beneficial to make adjustments to existing leases in order to continue generating income, even if it is less than you normally would be generating.
For those seeking medical treatment, the costs of medical bills can be intimidating. Even with insurance, testing can be expensive and wipe out any savings kept for health emergencies. Prior to the outbreak, the CDC reported 28% of uninsured Americans aged 18 to 65 struggled to pay medical bills last year and some reports show that more than 50% of bankruptcies had some medical debt reported. While the cost of treating the Coronavirus is currently unknown, testing for the virus is free of charge. Despite this, you still will be faced with charges for staying in the hospital and any other tests that may be run. For those who receive health insurance through their employer, coverage may be limited, meaning you may have to pay more money out-of-pocket than you expect to. For those who are uninsured, you may face unexpected charges. If you seek medical treatment during this time and are unable to afford the costs, you may be able to develop a payment plan with your provider.
If you have any concerns about your financial situation during this time, please know that our office is here for you. Please contact us if you need to discuss your options and take the necessary steps needed.
HOW CAN I PREVENT THE SPREAD OF COVID-19?
With the virus spreading quickly, it is important to take precautions and follow the CDC’s guidelines. Be sure to keep your distance with others and wash your hands with soap for at least 20 seconds regularly. Avoid touching your face and eyes and stay away from others who are feeling symptomatic. If you have recently being in contact with someone who has tested positive or are feeling symptomatic, be sure to self-quarantine to prevent the disease from spreading to someone else. Since there is currently no way to prevent or treat this disease, it is important that we keep following these rules.
HOW CAN WE HELP?
Your number one priority during this time should be keeping your family and yourself safe. By contacting our office, you can schedule a PHONE CONSULTATION with local Sacramento Bankruptcy Lawyer Pauldeep Bains. This way, you do not need to leave your home but can still seek the legal options that you potentially need. Please call 916-800-7690 immediately and schedule your no-hassle PHONE consultation with Mr. Bains to discuss your personal situation.
We help clients in the following areas: Sacramento, Elk Grove, South Sacramento, West Sacramento, Natomas, Citrus Heights, Antelope, Fair Oaks, Gold River, Rancho Cordova, Roseville, Rocklin, Lincoln, Wheatland, Yuba City, Marysville, Woodland, Davis, and Lodi.
