As the COVID-19 pandemic has continued the past few months, the financial fallout has been very severe for many people. Because of this, numerous individuals and business owners have been forced to declare bankruptcy to avoid further financial ruin. To help offset this, the CARES Act has brought about various changes to how Chapter 7 and 13 bankruptcies are carried out. By doing so, the legislation has made it more important than ever to fully understand what is involved in the process. To do so, consult at once with Brighton Beach bankruptcy lawyers at the Ursulova Law Offices.
Changing the Definition of Income
Perhaps most importantly, the CARES Act has now changed the definition of income for individuals filing for bankruptcy. Whether pursuing Chapter 7 or 13 bankruptcy, the recent stimulus checks of $1200 sent to individuals will not apply to the income calculation. By changing the definition of “disposable” income, it is now generally easier for many people to qualify for a Chapter 13 repayment plan.
Plan Modifications and Extensions
Along with allowing more people to fall under the threshold of being able to qualify for bankruptcy, the CARES Act has also brought about numerous modifications regarding payment plan changes and extensions. For example, while a typical Chapter 13 repayment plan is set up for 3-5 years, the CARES Act has extended this to as long as seven years. But to qualify for this extension, you will need to prove you have suffered from a “material financial hardship” that is directly related to the COVID-19 pandemic. Therefore, it will be important for you to have the necessary documents showing you do qualify for this relief.
Due to the many complexities involved in the bankruptcy process and the ever-changing conditions brought about by COVID-19, discuss your bankruptcy plans at once with Brighton Beach bankruptcy lawyers at the Ursulova Law Offices.
