Filing Bankruptcy During the Coronavirus
The last thing anyone wants to do is to file for bankruptcy. Even though bankruptcy enables people to get a new financial fresh start, there are still some negative impacts that the process has on the filer’s credit score and their overall financial record. The current national financial crisis caused by the COVID-19 pandemic has become dire for many individuals and families, with unemployment levels soaring to levels this country has not experienced since the Great Depression. For many people, filing bankruptcy during the coronavirus may be the best option available.
In fact, so many people may be filing for bankruptcy during the COVID-19 pandemic that the government has made temporary changes to the U.S. Bankruptcy Code. In March, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to address the economic crisis the COVID-19 pandemic is causing. The law provides more than $2 trillion in relief and is the largest stimulus aid package in the history of the United States. The Act provided some financial relief: $1,200 for individuals, $2,400 for married couples, and $500 for each dependent child.
The Act also provides additional unemployment benefits of up to $600 per week in addition to the benefit the individual receives each week from the state they live in. Despite these benefits, many people are still struggling financially. Anticipating the number of Americans who will need for filing for bankruptcy during the coronavirus crisis, the CARES Act also provides temporary changes to the U.S. Bankruptcy Code.
When a person files for bankruptcy, the bankruptcy trustee assigned to the case examines the filer’s assets and income to determine if they are eligible to file for bankruptcy. According to the stipulations outlined in the CARES Act, trustees cannot count either the stimulus payment or the additional unemployment payments as disposable income or current monthly income. These amounts can also not be used to determine if the person filing is able to pay their debt in a bankruptcy filing.
The Act also addresses current Chapter 13 filers with an existing repayment plan. They will be able to request modifications to the plan if they are having financial difficulties due to the COVID-19 pandemic. Your bankruptcy attorney can help you with the process needed to request these modifications.
Considering Filing for Bankruptcy? We Can Help
While the thought of filing for bankruptcy can be overwhelming for some people, it is often the best option. The legal team at Arcadier, Biggie & Wood, PLLC. We can schedule a confidential consultation with one of our attorneys to discuss filing for bankruptcy during the coronavirus crisis. Call our office today to see what legal options you may have.