How Has the COVID-19 Shutdown Affected the Economy?

All around the country, people are struggling in every possible way due to the pandemic. Hospitals are struggling, the economy is suffering, our relationships have changed, and businesses have shut down. While we trust that these effects are temporary, no one can be sure when the situation will truly be over and when we will fully recover.

Ultimately, people who were already struggling before the coronavirus will experience the most severe levels of financial hardship. The longer the pandemic lasts, the worse it may become, especially for people who live paycheck-to-paycheck.

Louisiana has been hit particularly hard, especially given preexisting circumstances. More people live paycheck-to-paycheck here than in most other states, and, for years before the pandemic, the state’s poverty rate was much higher than the national average. In 2018, for example, nearly one in five Louisiana residents lived in poverty, with cities like Baton Rouge at 26%. According to an analysis by the Livingston Parish News, over 30% of Louisianians are unemployed.

During a pandemic, public transportation can put more lives at risk because of increased exposure. But, according to a Dillard University sociologist, roughly a fifth of people in cities like New Orleans rely heavily on public transit because they don’t own cars.

Due to this situation, many people are pushing to reopen the economy, believing it will improve everyone’s financial circumstances and encourage a return to normalcy. But this could trigger a resurgence in COVID-19 cases, potentially overwhelming our healthcare system.

Surviving the Financial Effects of the Pandemic

If you are using a credit card or loan to pay for bills and other essentials, you aren’t alone. Hundreds of thousands of people in Louisiana are facing severe financial adversity due to layoffs, loss of business revenue, nonexistent savings, and unmanageable debt.

If you are struggling to overcome the financial impact of COVID-19, we suggest the following four strategies:

1. Take full advantage of government assistance. Heed deadlines, seek help with complex documents, and apply for as many forms of relief as possible. The worst that can happen is a denial.
2. Stay aware of new emergency legislation that provides financial relief or protects you from creditors. The CARES Act took effect in April, and Congress has discussed passing additional forms of relief in the future.
3. Push back against eviction and foreclosure. You may be protected by a state or federal moratorium.
4. Consider a more substantial form of debt relief, such as bankruptcy. While future government assistance is a possibility, we cannot know when this will arrive or who will be eligible for relief. Bankruptcy could be a long-term solution to unmanageable debt.

The impact of the COVID-19 shutdown may leave individuals and families struggling for months or even years after the pandemic is over. If you are looking for a long-term solution to this unprecedented challenge, let our team at Grand Law Firm help you assess your options. Bankruptcy may provide the fresh start you need, allowing you to build strong financial foundations for you and your loved ones. If bankruptcy isn’t right for you, we can help you find an alternative that accomplishes your financial goals.