Don’t miss this opportunity for additional relief with Chapter 13 Bankruptcy from the CARES Act.
COVID-19 has changed the world in numerous ways from putting entire countries on strict lockdown to taking the lives of millions to changing the way many companies do business. Many of these effects, like so many other world events, disproportionately negatively affect those who are struggling through difficult financial times.
Individuals who have declared bankruptcy have still had to make payments that were specified in their debt resettlement agreements. Thanks to the CARES Act, though, those who have outstanding Chapter 13 payments may be able to reduce their monthly payment amount.
DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.
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Disposable Income Amendments
Any payments made under federal law relating to the national emergency declared by the President cannot be counted as “current monthly income” or “disposable income” when considering the debtors repayment plan.
This provision will benefit those who are currently paying off bankruptcy payments and future Chapter 13 bankruptcy pursuants.
Payment Plan Modifications
The CARES Act permits debtors to seek payment plan modification if they can prove that they have suffered a “direct or indirect” hardship due to the COVID-19 pandemic.
The law does not give extensive definitions for “direct or indirect” hardships caused by the pandemic, so pursuants will have to make a verifiable case that they suffered financial difficulties because of the coronavirus pandemic.
It is unclear the extent to which debtors will be able to alter their original payment plans. However, the law allows for debtors to seek modification in their favor, so debtors should take advantage of this opportunity.
How Long Will This Last?
These amendments were originally put into law on March 27, 2020 and were scheduled to sunset, or expire, on March 27, 2021. However, due to the continued economic uncertainty from the pandemic, these amendments were extended until March 27, 2022.
If these amendments are not extended past the latest expiration date, then debtors have about six months to take advantage of these helpful provisions for Chapter 13 Bankruptcy.
David S. Clark Can Help
Having helped people file for and carry out Chapter 13 Bankruptcy plans for over 20 years, David S. Clark has had to adjust to changes in the law, changes in the larger culture, and countless other changes relating to his clients’ bankruptcy cases.
These recent changes are intended to help debtors. David S. Clark can help walk you through taking advantage of this opportunity, rather than failing to make your payments because of additional financial hardships caused by the COVID-19 pandemic.
Call David S. Clark today for help with the CARES Act reduced Chapter 13 Bankruptcy payments and modified payment plans.
DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.