Due to the current health crisis, many people have come into financial hardship. Even more people are turning to the benefits of bankruptcy to help them get back on their feet. Take a look at what bankruptcy can do for you during this time.
Benefits to a COVID Bankruptcy
As parts of the country are beginning to open up again, people are looking for a sense of social normalcy. In many cases, there are individuals, families, and businesses whose finances are anything but normal. Filing for bankruptcy has always been considered a negative outcome for a bleak financial situation, but there are many more benefits to filing than people realize.
The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), has amended certain provisions under Chapters 7 and 13 to help those that have specifically been affected by the COVID-19 pandemic:
Those with existing Chapter 13 payment plans who have suffered a “material financial hardship” due to COVID-19 will be allowed to seek changes to their plan. An example of such changes would include extending a payment plan for up to 7 years after the first payment plan was due, reducing the monthly payment obligation.
Coronavirus related payments from the federal government received by families and individuals will not be included in the definition of “income” for eligibility purposes. These payments will also not be considered as “disposable income” for plan confirmation purposes, allowing consumers to receive the full benefit of federal stimulus payments.
For business owners looking to file under Chapter 11, the debt ceiling will be raised from $2,725,625 to $7,500,000. At least half of these debts are still required to be business-related, and the debtor’s main occupation cannot be a single-asset real estate operation. The business must also file within one year of the effective date of the CARES Act to qualify for under these circumstances.
Contact Our Knoxville Bankruptcy Attorneys Today!
The current health crisis has stunted financial growth for thousands of families, individuals, and businesses across the nation. With bankruptcy becoming a reliable debt relief option, we use a compassionate and personalized approach to give you the best chance for success.If you have questions about how bankruptcy can work in your favor, contact us today through our website or give us a call at (865) 328-7993 to schedule your free consultation!