(215) 735-1060

What is Natural Disaster Debt and How Do I Rebound From It?

natural disaster


By:Mike Cibik


What is Natural Disaster Debt and How Do I Rebound From It?

This year has been one for the books with destructive hurricanes and wildfires. We have all seen the wreckage caused by Hurricane Maria, which was the strongest tropical cyclone in 2017. It struck a number of countries, including the Puerto Rico and Britain (British Virgin Islands). There was also Hurricane Harvey that hit Houston, Texas. The damage was nearly $200 billion. And we can’t forget about the wildfires in the west. All of them displaced hundreds of thousands of people and destroyed homes, vehicles, boats as well as personal belongings. To help the people of Puerto Rico, their government had to use another form of bankruptcy called the PROMESA law. (Puerto Rico cannot declare bankruptcy because it is a U.S. territory). Puerto Rico may never recover, and many of it citizens have been relocated to Florida.


Of course, no expects to be affected by a hurricane or wildfire. When they happen, people are caught off guard, and there is no time to figure out what they are going to do financially. To survive, people max out their credit cards and use up their savings to buy food and clothing along with lodging and transportation. They will also have a large insurance deduction to face when they are allowed to go back home to survey the damage. These people went into debt, not because of poor money management, divorce or illness; they went into debt buying necessities. So, what happens now? How does a family get out of natural disaster debt?


Tips for Rebounding from Disaster Debt

Apply for Disaster Assistance – As soon as you can, you should register for assistance. For example, the Federal Emergency Management Agency (FEMA) offers low-interest loans. There is also the Disaster Assistance Improvement Program. This program was created in 2006 to help disaster survivors get the help they needed, from services to applying for assistance from local, state and federal agencies.

Talk to Creditors – You shouldn’t be afraid to reach out to your creditors. Chances are, they are willing to help. You may be able to skip a payment, delay a payment, or arrange a payment plan. You should also ask to have the late fees waived. And call them more than once!

Devise a Short-Term Financial Plan – When we say short-term, we mean within five years. What could you pay off in five years? All of your debt? Some of it? This means going through all your bills and living expenses, including personal loans and credit card debt. Once this has been done, you should:

     -find the debt with the highest interest rate;

     -determine which debt you can easily pay off first, and

     -decide if debt consolidation is right for you.

You should also consider talking to a non-profit credit counseling agency for additional guidance. It’s important to note that the bankruptcy reform of 2005 does require participation in a credit counseling program prior to filing for bankruptcy.

File for Personal Bankruptcy – If you cannot pay your debts, especially if you have acquired new ones, this may be the best solution for you. If you need to clear all your debts, then you should file for Chapter 7 bankruptcy. If you make above the median income, you may be forced to file a Chapter 13 bankruptcy. With a Chapter 13, you agree to a payment plan, which can last up to five years. However, if you miss a payment, you are at risk of losing an asset(s). With all the complicated bankruptcy laws, it is important that you seek the services of a bankruptcy attorney.


There is a Financial Solution

There are people just like you who are in the same situation, who have lost everything due to a natural disaster. They will need guidance and financial assistance to get back to a semi-normal life. Some are fortunate that they didn’t amount a massive debt. And for others, bankruptcy is the only solution. At Cibik & Cataldo, we cannot stress enough that filing for bankruptcy is nothing to be ashamed about. Bankruptcy is just another financial strategy to help you start over again. It will take a large burden off your shoulders so you can focus on your family.


Schedule your Free Consultation

We can help you organize your debt, determine which assets are exempt and give the facts on bankruptcy so you can easily build your credit and buy a car. If you aren’t sure if filing for bankruptcy is right for you or a loved one, we invite you to a free consultation. We are happy to answer all your questions and address your concerns. We will come to you if you can’t come to our office on Walnut Street in Philadelphia. Contact us at 215-735-1060 today!



Bankruptcy Law Awards/Associations

We are a debt relief agency that helps people
seek bankruptcy protection under federal law