COVID-19 Business Bankruptcy Relief

COVID-19 had contributed to massive job losses, reduced working hours, salary pay cuts, and detrimental financial outcomes among Americans. If you have a business entity, you can consider filing for bankruptcy, especially if you have financial challenges. Fortunately, the Brooklyn Business Bankruptcy Relief Lawyers at Ursulova Law Offices are here to help you. Before you get in touch with the Brooklyn bankruptcy lawyers, you should understand the following business bankruptcy relief measures extended in 2021.

COVID-19 Business Bankruptcy Relief measures

In March 2021, President Joe Biden signed into law the COVID-19 Bankruptcy Relief Extension Act. The act extended the provisions of the CARES act that was enacted in 2019. In particular, it offered financially distressed small businesses and consumers enhanced access to bankruptcy. The main bankruptcy provisions that were extended up to 2022 include:

• The provision increased the business debt eligibility limit under subchapter 5 of the Small Business Reorganization ACT(SBRA) of 2019 from $2,725 625 to $7.5 million until March 27, 2022. The increased debt limit enables struggling small businesses with debts within a specific limit to file for bankruptcy so that they can reorganize themselves quickly without incurring costly expenses. The legislatures enacted Subchapter V under SBRA before the outbreak of the COVID-19 pandemic on February 19, 2020, as a subchapter of Chapter 11. In this case, the legislatures aimed to use to help small business debtors reorganize by minimizing expenses and making it easier and faster to file bankruptcy. 
• Changing the definition of income under the Bankruptcy Code for Chapters 13 and 7 could exclude COVID-19 related payments provided by the federal government so that they cannot be considered income. Excluding such payments is meant to help in filing bankruptcy.
• Permitting families and individuals who are currently covered by Chapter 13 to request modifications of their payment plans. In this case, they can only seek modifications if they experience material financial challenges associated with the COVID-19 pandemic. One of the modifications includes extending their payments for a maximum of seven years since the due date of their original payment plan.
• Clarifying that determining the disposable income to ascertain the Chapter 13 plan should exclude payments related to COVID-19.
• The Bankruptcy relief included the Consolidated Appropriations Act of 2021. Under this acting business, debtors covered by SBRA can request for an extension period of fewer than 60 days to undertake obligations such as rent payment that arise from the lease of non-residential properly amid the pandemic. Apart from that, debtors can take 210 days instead of the previous 120 days to decide if they wish to reject or accept leases for non-residential property.

The provisions will end on March 26, 2022.

How can a lawyer help you?

Filing for bankruptcy might be overwhelming. Since there are several kinds of bankruptcies and numerous paperwork required, you might feel like another extra when trying to navigate the New York bankruptcy claim process. If you add the extensive claim process to the ongoing changes associated with COVID-19, you can find the process more confusing. Fortunately, the attorneys at Ursulova Law Office, PC, have continued to constantly follow the latest bankruptcy changes and help all customers navigate any kind of bankruptcy, especially during this challenging period. 

Brooklyn Bankruptcy Attorneys uses state-of-the-art software that allows them to successfully and efficiently navigate through complicated arbitration systems. The lawyers will carefully review your billing statements and prepare arbitration submissions in the best format that will be advantageous to you. Even if you are considering filing for bankruptcy, or you are active in filing bankruptcy, this is the best time you can get in touch with one of the Brooklyn Business Bankruptcy Relief Attorneys at Ursulova Law Office.