9th April 2020
As I am writing this, we find ourselves in the middle of a lockdown due to the COVID-19 pandemic. Needless to say, these are unprecedented times and nobody can be certain what the future holds.
A lot of people have said to me that I must be really busy at the moment given I specialise in personal debt advice and helping people through bankruptcy. Strangely enough, actually quite the opposite is currently true (at least in the immediate term). There are a number of interesting things to consider here:
So, what happens next?
I think it is likely that in 45-60 days, large numbers of businesses and individuals are going to be running out of cash (if they haven’t already done so) and in 60-90 days, we will see a spike in formal insolvencies (both personal and corporate). By the time this lockdown is over, I believe that rather finding ourselves in recession, we will be in a global depression whose effects may last the best part of 10 years. Given that most governments and central banks have used their arsenal of tools to combat the last economic crash (QE, interest rate cuts etc), there will not really be anything left in the locker to deal with the economic aftermath of this pandemic.
What can we do now?
Now is the time to really take a look at your financial situation whilst you are not under creditor pressure. The problems are not going to go away because of the pandemic, but the can has just been kicked a few weeks down the road. Do your research and have a plan.
As an example, I was speaking to a potential client who sadly has found personal bankruptcy is inevitable. They were considering when the best time to start the process was and I advised them that now is the time. As you are kept in bankruptcy for 12 months, why not “serve” some of that time during the lockdown when you can’t do anything else anyway? By the time things start getting back to normal, you will be almost through the process.
Finally and in the immortal words of Douglas Adams, DON’T PANIC !
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.