Hurricane Ian recently swept through Southwest Florida, leaving a path of devastation. Homeowners have been left with costly expenses in its wake. Major storms like Ian not only cause widespread damage that homeowners must pay to repair, but they also create other expenses due to lost wages, mandatory evacuations, purchased supplies, etc. These costs can add up quickly. They can leave those struggling to get by facing further uncertainty and even more outstanding debt. For individuals in this situation, filing for bankruptcy may be the solution they need. There are a few ways to manage the financial effects of a natural disaster before filing Chapter 7 or Chapter 13.
You never plan on bankruptcy, but you can prepare for a storm. While many natural disasters are unpredictable, it is always best to plan for the worst-case scenario. It is crucial to keep all essential paperwork in a safe place. This includes documents such as all loan paperwork, individual social security cards, insurance policies, and other documents that may need to be referenced after a disaster. Review your homeowner’s insurance policies to understand what types of damage are covered. If you do not understand your policy or believe you need additional coverage you should speak with an insurance agent to discuss your coverage.
Before spending your precious cash reserves or putting things on a credit card, explore the relief options available. In the aftermath of major storms, programs will likely be in place to assist those hit the hardest financially. For instance, FEMA’s Transitional Sheltering Assistance Program allows FEMA to make payments directly to participating hotels and motels in Alabama, Florida, and Georgia that provide emergency shelter to survivors. In addition, FEMA’s Individuals and Household Program (IHP) assists qualified individuals. This program offers rental assistance, basic home repairs, personal property losses, and other eligible expenses related to storm damage. FEMA can also provide rent for a temporary place to live. This is intended to cover monthly rent, security deposit, and the cost of essential utilities like water and electricity. The IHP assistance program is intended to aid you in your recovery. It will not restore your home to pre-storm conditions, but it can help with the household’s basic needs. Some examples are:
The U.S. Small Business Administration offers low-interest disaster loans to homeowners, renters, and business owners.
Disaster Unemployment Assistance may be available. You must file a claim for loss of income caused by the disaster. In addition, low-income Florida residents may qualify for assistance from the Department of Agriculture’s Disaster Supplemental Nutrition Assistance Program (D-SNAP).
Here is a link for FEMA’s disaster assistance. https://www.fema.gov/assistance. In order to receive benefits, you apply. Always seek state or federal assistance before draining your savings or relying on credit cards. These systems are put in place for this reason. Other programs, such as loan modifications and negotiated payments, may be available on a situational basis and are worth exploring.
After a disaster strikes, you need every penny available because it might keep you and your family alive. Unfortunately, insurance, reimbursements, and other forms of relief can take weeks or months to kick in, and you must survive. It is understandable why paying bills generally takes a back seat. However, neglecting to pay bills results in exorbitant late fees and can send your balances through the roof.
Fortunately, most, if not all, creditors are aware of the snowball effect that disaster recovery can have on a person’s finances. Many creditors will work with disaster victims to provide relief through temporary payment suspension, limiting finance charges, and in some cases, increasing credit lines. Be careful with the latter option. That will eventually have to be paid back. Call your creditors and explore relief options that may be available. Using credit cards should be a last resort.
Contact credit card lenders, mortgage companies, and any other creditors that you have. In the wake of a disaster, your creditors may waive late fees, lower interest rates, and even allow for a deferred payment.
Get a free copy of your credit report! If you notice late payments have affected your credit score, add a statement to your report explaining your situation. You may still see some impact, but future lenders will be aware.
Miller, Hollander, and Jeda are here with you through any disaster. If bankruptcy is your only option, navigating the process following a natural disaster can be difficult. Having an experienced bankruptcy attorney by your side is crucial. There are protections afforded to those recovering from hurricanes, floods, etc., but you may need an attorney to take advantage of them. If you have any questions about filing bankruptcy following a natural disaster, we are here to help to determine the best course of action for your unique situation. Recovering from a disaster can be a scary and painful time. However, don’t sabotage your recovery efforts by sinking yourself into debt. Contact Miller, Hollander & Jeda to discuss your options and protect your assets.
Miller, Hollander & Jeda’s founding attorneys began practicing in the early 1970s before putting down roots in the area and joining forces in 1992 to create the Naples, Florida, law firm that bears their names. Since its inception, Miller, Hollander & Jeda has focused on bankruptcy. The goal of our attorneys and our experienced staff, established at the outset and built upon year by year, is to use our extensive knowledge of bankruptcy law to answer the complicated questions you have regarding your financial trouble and help you solve your problems. We take pride in helping clients get a fresh start.