Ask Bankruptcy Attorney in Sacramento Stockton Fairfield CA – How COVID-19 and the CARES Act Affect Bankruptcy

CARES Act and Bankruptcy. People who are affected by COVID-19 will benefit from the changes in Bankruptcy by the CARES Act.

Chapter 13 Bankruptcy Plan can be extended to 7 years term

Under 11 U.S.C. 1329(d), a debtor who is experiencing or has experienced a material financial hardship due to coronavirus disease 2019 (COVID-19) pandemic may request a Chapter 13 Bankruptcy Plan modification for up to 7 years term. If you are having trouble making your monthly payment, this proposal can lower your monthly payment.

Chapter 7 Bankruptcy Means Test

Under Section 1113(b)(1)(A) of the CARES Act, payments made under the Federal law relating to the national emergency declared by the President under the National Emergencies Act with respect to the COVID-19 is excluded from the calculation of the current monthly income. This means that payments received from the CARES Act is not counted against you when determining your eligibility for Chapter 7 Bankruptcy under the Means Test.

CARES Act and Bankruptcy: Property of the Estate

However the CARES Act does not specify the treatment of the payment as “property of the bankruptcy estate” for bankruptcy cases filed after March 27, 2020, the effective date of the Act. The US Trustee website only specifically address the rebate payments. That is $1,200 for individual or $2,400 for married couple filing jointly with an additional $500 for each qualifying child under the age of 17. In their website it states: “Regardless of whether the rebate is property of the estate, the United States Trustee expects that it is highly unlikely that the trustee would administer the payment after consideration of all relevant circumstances, ….”.

For more information, call experienced Sacramento Bankruptcy Attorney Muoi Chea. For over 10 years she have been representing consumers and small businesses throughout Northern and Central California in Chapter 7 and 13 Bankruptcy proceeding at Sacramento and Modesto Bankruptcy Court. She accepts cases from Elk Grove, Sacramento, Lodi, Galt, Citrus Heights, Carmichael, Roseville, Rocklin, Auburn, Folsom, El Dorado, Tracy, Stockton, Vacaville, Fairfield, Vallejo, Benecia, Davis, Woodland, Yuba, Sutter, Yuba City, Marysville, Modesto, Nevada County, and other neighboring cities.

Fairfield Bankruptcy Attorney number: 707-394-4195

Stockton Bankruptcy Attorney number: 209-751-7448

Sacramento Bankruptcy Attorney number: 916-441-4205

Lodi & Galt Bankruptcy Attorney number: 916-441-4205

Tracy Bankruptcy Attorney number: 209-751-7448