Congress: “Extend Your Confirmed Chapter 13 Case from 5 to 7 Years during COVID-19”

The massive bailout passed by Congress last week known as the CARES (Coronavirus Aide, Relief and Economic Security) Act contains several provisions helpful to those considering in pending Chapter 7 and Chapter 13 bankruptcy cases.

These provisions include the following:

Chapter 7 and Chapter 13

  • For purposes of calculating a debtor’s income to determine his or her eligibility for Chapter 7 and Chapter 13, coronavirus-related payments from the federal government are excluded from the debtor’s analysis.

Chapter 13 Only

    • Coronavirus-related payments shall not count in determining a debtor’s disposable income for a Chapter 13 plan of reorganization.
    • Lastly, the CARES Act allows Chapter 13 debtors who have already confirmed a plan to modify the plan based on a material financial hardship caused by the pandemic, including extending their payments for seven years after their initial plan payment was due.

The changes apply in pending Chapter 7 and Chapter 13 cases and will be applicable for one year from the effective date of the CARES Act.

Should you need to consult with a Bankruptcy attorney, please contact Winslow & McCurry, PLLC at (804) 423-1382.