The COVID-19 crisis has sent unemployment filings into a tailspin. According to ABC News, nearly 10 million Americans filed for unemployment protections in March 2020. Businesses quickly shuttered their doors. Others sharply reduced hours for employees and limited what services they offered to the public.
Filing Bankruptcy in the Coronavirus Era
Experts say that bankruptcy filings are sure to follow in this unprecedented economic crisis. Economists at Market Watch expect bankruptcy filings to surge in the coming months. How has bankruptcy changed because of Coronavirus? If you’re going to file for bankruptcy, or if you’re already in the middle of a bankruptcy proceeding, you need to know what’s changed. Our Las Vegas bankruptcy attorneys explain how Coronavirus may impact your bankruptcy case.
How Will Your Bankruptcy Case Be Affected by Coronavirus?
Coronavirus can impact your bankruptcy case and your ability to file for bankruptcy. If you’ve already filed, Coronavirus may delay your court dates. Procedures for hearings, signatures, and even entry into the courthouse may change.
You may have additional time to complete your repayment plan under a Chapter 13 filing. However, the stay of collections of your debts should continue uninterrupted. Generally, bankruptcy laws and the end result shouldn’t change. However, Coronavirus may impact some of the procedures and timelines of your bankruptcy case.
Chapter 7 and Chapter 13 Filings in the Age of Coronavirus
Coronavirus may impact your eligibility to file for bankruptcy. The type or types of bankruptcy that you’re eligible to file depend on your income. If you lose your job, you may be able to file a Chapter 7 proceeding that may not have been possible before.
Whether you lose your job directly or indirectly because of Coronavirus, it may have an impact on the best course of action as far as what type of bankruptcy you can and should pursue. An experienced bankruptcy attorney can help you explore your options.
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The Coronavirus Relief Law May Extend Your Time to Pay Under a Chapter 13 Plan
The Coronavirus bill signed into law in March 2020 provides some relief for individuals making payments under a Chapter 13 bankruptcy plan. Under the new law, individuals have a one-year window to change their repayment terms. You may extend your time frame to complete a Chapter 13 payment plan by up to two years.
To have relief under the new Coronavirus relief law, you must notify the court of your new circumstances. If you need more time to pay, you need to either make a motion to the court or enter a stipulation that you’re no longer able to make the necessary payments. Keeping the court up to date on your current situation and getting the required court orders ensures there is no confusion.
Bankruptcy Court Procedures That May Change Because of Coronavirus
Because of Coronavirus, court procedures have changed significantly. It’s always important to prepare for what to expect when you walk into a courthouse. This is an equally important step when you have a bankruptcy proceeding during the Coronavirus crisis. However, you may not know how to prepare.
Procedures for how bankruptcy court works may have changed. Mainly, these changes are being handled at a local level. In other words, you need to read your paperwork carefully and speak with your attorney about essential things that may have changed.
Here are some of the bankruptcy court procedures that may change because of Coronavirus:
- In-person procedures – Many bankruptcy proceedings are moving online. Usually, hearings in the courthouse are required, but many courts are waiving this requirement because of Coronavirus. Even a 341 meeting of creditors may be conducted by phone.
- Courthouse entry – To enter a courthouse, you usually go through a metal detector. However, entry requirements may have changed. Entrances may be limited, and there may be additional checks at the door. There may be instructions for social distancing in hallways and at hearing tables as well.
- Clerk hours – Clerks may have reduced hours to limit social contact and allow time for sanitation.
- Service of process – Rules for serving documents may be relaxed. Be sure to check ahead of time that your planned method of service is sufficient.
- Signatures – Electronic signatures or proxy signatures may be allowed where they would not have been accepted before.
How do you know what processes have changed? How do you know what to expect? Be sure to read your court documents carefully. Check with your attorney in advance of your hearing and read your court’s website for notifications. Be sure to check for updates often, because rules can change quickly.
Do Coronavirus Stimulus Checks Count in the Bankruptcy Means Test?
No, stimulus checks issued because of the Coronavirus crisis do not count as part of the bankruptcy means test. Your eligibility to file for Chapter 7 bankruptcy does not change if you receive a stimulus check. Similarly, a stimulus check does not impact your ability to pay under a Chapter 13 repayment plan.
Bankruptcy Laws Remain the Same During COVID-19
The bulk of bankruptcy laws in the United States are still in place despite the Coronavirus outbreak. If you have debts that you’re able to pay, you may still qualify to discharge them under a Chapter 7 or Chapter 13 filing. Automatic stays that prevent debt collection during a bankruptcy proceeding are still intact. If you’re unable to pay your bills and need to file for bankruptcy, remember that bankruptcy protections still exist to help you.
Debts that are not covered by bankruptcy, however, must be handled separately. If you pay child support, and your income changes because of Coronavirus, you must petition the family court for relief. Tax debts are not subject to discharge. Substantive bankruptcy laws haven’t changed. As you proceed through bankruptcy, continue to take the time to understand how bankruptcy laws work.
COVID-19 Bankruptcy Lawyers in Las Vegas
If you’re overwhelmed with debt because of the Coronavirus crisis, call our COVID-19 bankruptcy lawyers today. Let us explain your rights and walk you through the best course of action. You have options, and you don’t have to fight alone. Call us today for an immediate consultation.
Also, check out more Coronavirus relief resources for Nevada residents. Be sure to take advantage of all the benefits available to you during this uncertain time.